Category Archives: Trade

Europe’s Plan To Boost LNG Imports From US, Elsewhere Faces Major Obstacles, by Tyler Durden

Posted on March 30, 2022 | Leave a comment

That the U.S. doesn’t have the LNG facilities for a massive boost of exports and Europe doesn’t have the LNG facility for a massive boost of imports do indeed constitute major obstacles. From Tyler Durden at zerohedge.com:

European leaders have grown quite fond of bandying about the notion of liberating their economies from their dependence on Russian oil and gas. Unfortunately, the numbers just don’t make sense.

On Tuesday, the FT highlighted how Washington’s pledge to wean Europe off of Russian gas by boosting LNG exports simply doesn’t add up.

As a reminder, the US plan is supposed to work in three steps: first, it will help the EU secure short-term liquefied natural gas supplies to begin displacing Russian gas. Second, Europe will work “toward the goal of ensuring” a bigger market for US gas by 2030. Third, the US would help Europe accelerate its transition to clean energy.

But how much more gas can the US even export? Limits on both exporters’ capacity and Europe’s infrastructure and ability to absorb gas imports by boat suggest that, for the foreseeable future, the notion of offsetting Russian energy exports is pretty much a pipe dream.

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The Impossibility Of Autarchy, by Daniel Lacalle

Posted on March 29, 2022 | Leave a comment

Trade within a country or among countries happens for reason: both parties benefit. If a country could achieve self-sufficiency in everything (autarchy), it would be shooting itself in the foot, denying itself the benefits of trade. From Daniel Lacalle at The Epoch Times via zerohedge.com:

The invasion of Ukraine, the spike in inflation, and the risks of supply shortages have made some politicians dust off some of the worst economic ideas in history: autarchy and protectionism.

Shipping containers are unloaded from ships at a container terminal at the Port of Long Beach-Port of Los Angeles complex in Los Angeles, Calif., on April 7, 2021. (Lucy Nicholson/Reuters)

Some believe that if our nation produced everything we needed, we would all be better off because we wouldn’t depend on others. The idea comes from a deep lack of understanding of economics. There’s no such thing as autarchy. There’s no such thing as covering all the needs of a population based on the limit of a politically defined border. It makes no sense.

If I told you that I wanted to make my city self-sufficient, you would laugh about it, understanding that it’s impossible and that the reason why my city thrives is because of the interaction and commerce with other cities. However, when a group of politicians defines a nation’s border, we’re immediately led to believe that thos

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Posted in Economics, Geopolitics, Governments, Trade

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No Entangling Alliances by Jacob G. Hornberger

Posted on March 26, 2022 | Leave a comment

John Quincy Adams got it right. From Jacob G. Nornberger at fff.org:

Assuming that America can avoid a nuclear war with Russia, the American people would be well-served to ponder and reflect on some of the good founding principles of our country. One of those good founding principles was “no entangling alliances.”

It would be difficult to find a better example of an entangling alliance than NATO, which is really nothing more than a Cold War dinosaur. Having been called into existence as part of the U.S. national-security establishment’s Cold War racket, it should have gone out of existence at the ostensible end of the Cold War.

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Posted in Foreign Policy, Geopolitics, Governments, Money, Politics, Trade

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Elon Musk and the Chinese Temptation, by Peter Schweizer

Posted on March 25, 2022 | Leave a comment

The Chinese market and China’s government pose huge dilemmas for Elon Musk and other U.S. entrepreneurs. From Peter Schweizer at gatestoneinstitute.com:

  • “Other American CEOs have close relationships to the [Chinese Communist] Party. But [Elon] Musk is the only one who loudly praises Beijing while running a space company with incredibly sensitive and powerful defense applications.” — Isaac Stone Fish, Barron’s, November 13, 2020.
  • Musk’s dilemma is not unique. The close technology-sharing relationship between Tesla and SpaceX poses national security risks to his adopted home country, but so do Google’s and Microsoft’s work with China on artificial intelligence. U.S. government policy is predictably slow in catching up to the speed of hard-charging, globe-spanning enterprises like Musk’s, and the Chinese are only too happy to increase that gap.
  • At some point, however, companies such as SpaceX, Google and Microsoft, and the individual Americans who own, direct, or invest in them, will face a similar choice between their obligation to America and their pursuit of more profits abroad.

“Other American CEOs have close relationships to the [Chinese Communist] Party. But [Elon] Musk is the only one who loudly praises Beijing while running a space company with incredibly sensitive and powerful defense applications.” — Isaac Stone Fish, author of America Second: How America’s Elites Are Making China Stronger. Pictured: Musk meets with China’s Premier Li Keqiang in Beijing on January 9, 2019. (Photo by Mark Schiefelbein/AFP via Getty Images)

Elon Musk has fans all over the ideological spectrum. People on the Left love him for popularizing electric cars with his Tesla company, or maybe for openly smoking pot on podcaster Joe Rogan’s show. Conservatives love him for his entrepreneurial dash and penchant for standing up to politicians and Big Tech censorship of the internet. And everyone loves Musk for responding to Russia’s invasion of Ukraine and severing of its communications links by making his Starlink satellite broadband internet service available in Ukraine and donating Starlink terminals to Ukrainians. The Starlink connectivity, according to one report, may even be helping armed Ukrainian drones target Russian military vehicles.

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Posted in Business, Foreign Policy, Geopolitics, Governments, Military, Politics, Technology, Trade

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Will Biden Sanction Half the World to Isolate Russia? By Ryan McMaken

Posted on March 24, 2022 | Leave a comment

If only half the world is sanctioned, how is Russia isolated? From Ryan McMaken at mises.org:

It is becoming increasingly apparent that isolating Russia and totally cutting it off from the global economy is not going to be easy.

As I discussed last week, from Mexico to Brazil to China to India and much of Africa, the world is resisting Washington’s call to treat Russia as a pariah nation. In the words of James Pindell, “Most of three huge continents—Asia, Africa, and South America—are either still working with Russia or trying to project the image of neutrality.”

Yes, the US will certainly inflict a lot of damage on the Russian economy with its sanctions, but it’s unlikely to be enough damage to incapacitate the Moscow regime. This is because much of the world has shown it plans to continue having relations with the Russians, albeit while taking some efforts to avoid any direct policy confrontation with Washington.

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Bonfire of the Governments, Part Two, by Robert Gore

Posted on March 23, 2022 | 24 comments

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wsj.com

Welcome to the bonfire of the governments, history’s greatest conflagration.

Part One

Think of an activity that’s essential for a government bent on subjugation: censorship and the suppression of expression. Governments on both sides of the present conflict have further jacked up their efforts to control expression from the plateau reached with Covid. Russia just passed a law imposing a 15-year prison sentence for anyone spreading “fake news” about its invasion of Ukraine. The U.S. and European governments and lapdog legacy and social media have blanketed populaces with official propaganda. Just as with Covid, questions and deviations from the approved narrative are stifled, censored, and punished.

It was all so much easier back in the post World War II, pre-internet good old days. In the U.S. and Europe, there were several “papers of record” that had been infiltrated by intelligence agencies, and state-licensed radio and television stations. In the Soviet Union there wasn’t even that, just a few official propaganda organs.

Yet even with that degree of control, government repression wasn’t wholly effective. In the U.S. the truth got out about the Vietnam War. The Soviets could stop everything but people talking with each other, albeit in hushed tones. The cynical humor became legendary. (“They pretend to pay us, we pretend to work.”) Humor always contains an element of truth, which is why statists can’t do humor. The number of citizens red-pilled to Soviet corruption and incompetence and the comparative freedom and wealth of the West reached critical mass and the government fell. It took way too long, but it happened.

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Today, there are billions of potential journalists and video producers—anyone with a cell phone and access to the internet—and trillions of text and email communications. People still occasionally engage in face-to-face conversations. The infrastructure needed to monitor all this is complex, gargantuan, and costly. Only algorithms and artificial intelligence can sort through it to identify threats to the state. Once identified, a separate infrastructure is necessary to apprehend, arrest, process, incarcerate and perhaps execute those engaged in wrongthought, wrongspeak, wrongwrite, and wrongact.

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Ukraine UXB: Germany’s Fuhrerprinzip Problem, by John Ward

Posted on March 21, 2022 | Leave a comment

Germany is going to bear the brunt of the U.S.’s proxy war against Russia. From John Ward at therealslog.com:

Part 2: A simple question for NATO & Brussels: do you contain Putin by collapsing the European Union?

In this second part of today’s double-header, The Slog looks at the untold consequences of trying to bankrupt the Russian Federation, and wonders just how many Europeans would be prepared to pay that price. More specifically, the so-called sanctions present Germany with an insoluble dilemma. Cracks may soon start to appear in the entire EUNATO defence rationale.

Very few people really understand the full extent of collapse we will almost certainly be looking at if and when Russia defaults. Naturally, the propaganda sins of omission continue; thus, although there’s a gigantic problem for the sanctioning folks, they don’t want you to know about it. The BSDs out there need to rethink the current jingoism, and ask themselves whether the cost of “containing” Putin is either worth it…or indeed, a problem they need to worry about in the first place.

To kick off things off with an appetiser, you probably failed to notice this, but Russia paid its due debt installment in full last Friday.

You probably didn’t see that, because the MSM blanked it. They want you to think that Russia is doomed, but they can’t deal with evidence that this is not the case.

In the same spirit but on a different subject, what’s also just come to light via objective observers is that, since Russian speakers in the eastern Ukraine provinces Donetsk and Luhanks voted to leave and become Russian provinces again, 15,000 Russian speakers have died in blatant breakages of the Minsk accord by Ukrainian far Right nationalists. As this bores a large hole in the “plucky Zelenskyy” script, our media don’t talk about that either.

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Posted in Banking, Business, Collapse, Foreign Policy, Geopolitics, Governments, History, Politics, Propaganda, Trade, War

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Why Markets Always Beat Central Bankers and Presidents, by David Stockman

Posted on March 21, 2022 | Leave a comment

Economies have never, cannot be, and never will be controlled from above, buy either governments or central banks. From David Stockman at internationalman.com:

Beat Central Bankers
Goodness me, even the Wall Street Journal is catching on. In a piece about the inflationary rebound theory of a former UK central banker named Charles Goodhart, it actually tees-up the possibility of high inflation for a decade or longer due to an adverse, epochal shift in the global labor supply.

He argued that the low inflation since the 1990s wasn’t so much the result of astute central-bank policies, but rather the addition of hundreds of millions of inexpensive Chinese and Eastern European workers to the globalized economy, a demographic dividend that pushed down wages and the prices of products they exported to rich countries. Together with new female workers and the large baby-boomer generation, the labor force supplying advanced economies more than doubled between 1991 and 2018.

He got that right. Now, however, the working-age population has started shrinking for the first time since World War II in developed economies, compounded by an ever more generous banquet of Welfare State free stuff that is shrinking the available labor pool even further. At the same time, China’s working force is expected to contract by a staggering 20% over the next three decades.

Needless to say, as global labor becomes more scarce, developed world workers will finally have bargaining leverage to push up their own previously stagnant wages. In the US leisure and hospitality sector, for instance, where worker shortages are most acute, Y/Y wage gains have averaged 15% for the last three months running.

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The Last Straw, by James Rickards

Posted on March 20, 2022 | Leave a comment

Russia is resilient enough to recover from U.S. sanctions. From James Rickards at dailyreckoning.com:

The U.S. and its allies in the EU and others around the world have imposed the harshest economic sanctions on Russia that have ever been used. In the past, even nations directly at war with each other would continue to pay the debts they owed each other.

Since this war is in Ukraine, let’s look at another war that took place in present Ukraine from 1854–56, during the Crimean War.

Britain (and France) was at war with Russia. Yet throughout the war, the Russian government kept paying interest to British holders of its debt. The British government also kept paying its debts to the Russian government.

One British minister said that civilized nations should pay their debts, even to an enemy during wartime.

But that was then and this is now. The U.S. and its European allies outside of Ukraine aren’t even directly at war with Russia (not yet anyway), but they’ve still imposed the most punitive economic sanctions in history.

To a great extent, the Russian economy has been cut out of the global economy.

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US Recklessly Eyes China as Target in Economic War, by Joe Lauria

Posted on March 19, 2022 | Leave a comment

If the U.S. sanctions China in the same way it has sanctioned Russia, it will be doubling down on stupidity. From Joe Lauria at consortiumnews.com:

Western officials say Russia is asking China for military help — denied by Beijing — in what is clearly an effort to build a case to include China in its economic war against Moscow, writes Joe Lauria.

Biden-Xi video summit on Friday. (White House)

The United States is setting up China as a second target of its intense economic war against Russia in what could have cataclysmic effects on the world economy, including the West.

The U.S. could not impose the most stringent sanctions on Moscow without the Russian invasion of Ukraine, and now the U.S. is trying to link China to the war.

Washington’s move to frame Beijing emerged Monday when unnamed U.S. officials told its allies that Russia had asked China for military aid in Ukraine. Reuters reported: “The message, sent in a diplomatic cable and delivered in person by intelligence officials, also said China was expected to deny those plans, according to the official, who spoke on condition of anonymity.”  China indeed denied it.

Importantly, Reuters added: “The U.S. government offered no public evidence to back its assertions of China’s willingness to provide such aid to Russia.”

On that same day Jake Sullivan, the U.S. national security adviser, led a delegation to Rome to meet with Yang Jiechi, a member of the Chinese politburo. After the meeting, an unnamed senior U.S. official in Rome told reporters: “We have deep concerns about China’s alignment with Russia at this time, and the national security adviser was direct about those concerns and the potential implications and consequences of certain actions.”

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