Energy & Commodities
China is making a major power play to expand its global energy influence. The United States has long played an outsized role in global geopolitics and energy markets thanks to the shale revolution which jettisoned the country to the top of the fossil fuel food chain. But if you’ve been keeping up with any headlines out of the Permian Basin over the last few years, you know that the shale revolution is dead. As oil prices remain disastrously low, the U.S. is losing its foothold in global oil and energy markets, and when the dust clears and the geopolitical maps are redrawn, China could very likely come out on top. Under President Xi Jinping, Beijing has made considerable inroads into power markets around the world.
This is in no small part thanks to the country’s assertive Belt and Road Initiative, which was announced back in 2013. President Xi’s global infrastructure development program entails hefty Chinese-led investment in as many as 70 countries and international organizations around the world.
China’s move into global energy markets is diverse and widespread, from nuclear to coal to renewable energies. Beijing’s geopolitical efforts have been particularly pronounced in Africa, a largely untapped market for energy infrastructure development and demand growth that Beijing is quite keen to dominate. In fact, China has been battling it out with Russia in recent months to establish dominance in the continent’s nascent nuclear sector. CLICK for complete article
Quotes of the week
British historian, David Starkey on a revolution by stealth by quasi-religious puritan ideologues
Shocking Stat
A second wave? That may be it for the travel industry and the consequences will shock you.
Goofy Award
To say there’s only one side causing the divisions in the US, as the media often does, is obliterated by the nasty, foul mouthed, celebrity responses in the aftermath of the Biden victory.
The $100B+ Housing Debt Bubble Is Going To Burst
“Being self-employed, I don’t like to add extra bills or burdens, and with a moratorium, there’s no guarantee that later I won’t be further into debt.”
Lucy, freelance photographer, Colorado – July 2020
Lucy’s concern about accumulating debt echoes across America. Millions of renters and homeowners are anxious about paying both their monthly housing bill and a ballooning debt balance.
Based on present missed payment rates, consumers will accumulate at least $100B in housing debt by January 2021. The following model describes a set of linked health, social and economic events. These events are likely to unfold in next 6 months. An uncontrolled wave of virus infections drives the cascading economic impact:
Virus growth uncontrolled > economic activity contracts > unemployment rises
> personal income falls > consumers miss rent and mortgage payments
> rent and mortgage payment moratoriums fail > consumers use credit cards to make payments
> small business apartment landlords & homeowners default on mortgages (debt bubble bursts)
> consumer spending dives
Our analysis starts by examining the virus 3rd wave and a likely increase in lockdowns.
Virus Growth Uncontrolled
On November 2st the U.S. had a 44% increase in daily COVID-19 to 93,581. The chart below indicates the second wave of infections did not decline to the first wave low. Thus, experts forecast a third winter wave peak of cases will be higher than the second spring wave peak.
Hospitalizations are rising in 42 states. Nineteen states report their highest hospitalization rate since the pandemic began in March. Uncontrolled virus infections will result in more partial or full lockdowns of intense social activity businesses including, hotels, restaurants, bars, theaters, sports stadiums, indoor arenas, offices, transit, airlines, hair salons, and personal services. An indication of what the U.S. may face soon is unfolding now in the United Kingdom, Germany, and France. These EU countries are tightening pandemic restrictions at levels not seen since last June. Meantime, U.S. businesses, such as internet entertainment, technology services, eCommerce and, socially distanced grocery stores, will continue to grow…CLICK for complete article
The COVID pandemic has hit the global economies like a tsunami, leaving unprecedented financial disaster in its wake. The modern world (with the possible exception of the Wehrmacht Republic) has not seen anything like it.
The U.S. government has tripled its budget deficit to $3.1 trillion in an attempt to soften the economic blow for its citizens. This is a considerable increase from the fiscal year 2019 deficit of $984 billion. The deficit is expected to make up 16 percent of the GDP by the end of the fiscal year 2020.
At the same time, the federal debt will comprise 98 percent of GDP. The situation is made worse because millions of citizens are out of work.
Thousands of businesses have closed, either temporarily or permanently, thus cutting off sources of tax revenues for the federal and state governments. At the same time, the government has had to meet the needs of so-called entitlement programs such as Medicare and Social Security. We see a gigantic chasm between U.S. government spending ($6.55 trillion) and U.S. government revenue (3.42 trillion). Four trillion dollars have gone toward relief measures for unemployed citizens and struggling businesses. There will likely be more relief spending in the near future. The U.S. annual deficit is expected to outpace the U.S. at 102 percent of GPD.
According to Maya MacGuineas, president of the Committee for a Responsible Federal Budget, “We should be borrowing now, but once the economy recovers, our debt cannot continue to grow faster than the economy forever.” CLICK for complete article
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What’s One Thing That Can Improve Government?
Posted by Michael Campbell
on Saturday, 14 November 2020 11:52
As Economist Thomas Sowell says, the past three decades can be characterized by replacing what worked – with what sounded good. And there’s one big reason why.