Tag Archives: Infrastructure

How the New Silk Roads are merging into Greater Eurasia, by Pepe Escobar

Russia is turning towards Asia, perhaps having given up on the West. From Pepe Escobar at atimes.com:

Russia is keen to push economic integration with parts of Asia and this fits in with China’s Belt and Road Initiative

People take pictures of the first freight train from Shenzhen to Minsk, capital of Belarus, that set out of Yantian Port in Shenzhen in May 2017. Photo: Reuters / stringer

People take pictures of the first freight train from Shenzhen to Minsk, capital of Belarus, that set out of Yantian Port in Shenzhen in May 2017. Photo: Reuters / stringer

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Has California’s Green Ideology Left It Burning? by James Pinkerton

Infrastructure investment in California has not kept up with population growth, which leaves the state increasingly vulnerable to fires. From James Pinkerton at theamericanconservative.com:

The state didn’t invest in infrastructure and so the fires rage.

Once upon a time, the U.S. government looked ahead to a growing population—and looked to make sure that people would be safe and productive where they lived.

It was understood that while the familiar elements of nature—earth, wind, water, and fire—could be life-giving, they could also be death-bringing. And so, as part of the modern social contract, the state stepped in to aid growth and curb destruction.

Yet today, as wildfires engulf much of California, that social contract has been incinerated. That is, at least 79 are dead, and perhaps 1,000 are missing, yet officials seem mostly helpless to stop the damage. Indeed, the entire state seems to be de-modernizing, as air quality plummets, refugee camps are built, and fears of epidemics re-emerge.

But here’s a bet: that can-do spirit that once aided human flourishing will make a comeback. That is, it’s only a matter of time before Californians—and all Americans—demand that the government once again start putting people first.

Why this confidence? Because it happened before.

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China’s “New Silk Road” Project Hits Debt Jam, by Tyler Durden

Is debt catching up to the grand New Silk Road vision? From Tyler Durden at zerohedge.com:

President Xi Jinping’s “Belt and Road” trade infrastructure project could be hitting significant bottlenecks as some countries begin to sound alarms regarding the massive debt loads their governments are incurring.

Xi first announced the trade initiative also known as the “New Silk Road” in 2013, which needs more than $26 trillion of infrastructure investment by 2030 to keep regional economies expanding. The project includes railways, power plants, ports, highways and other projects across the world, with Beijing providing billions of dollars in credit to drive these schemes.

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The Last Hurrah Before the Dark Years, by Egon von Greyerz

He’s probably right. From Egon von Greyerz at goldswitzerland.com:

This is it! The autumn of 2018 will be momentous in the world economy, markets and politics.
We are now seeing the Last Hurrah for stocks, bonds, the dollar and most asset markets.

The world economy has been living on borrowed time since the 2006-9 crisis. The financial system should have collapsed at that time. But the massive life support that central banks orchestrated managed to keep the dying patient alive for another decade. Lowering interest rates to zero or negative and printing enough money to double global debt seem to have solved the problem. But rather than saving the world from an economic collapse, the growth of debt and asset bubbles has created a system with exponentially higher risk.

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The Looming Crisis You’re Not Hearing About, by Jim Rickards

It doesn’t get much press, but America’s infrastructure is exquisitely vulnerable to hacking and other malfeasance. From Jim Rickards at dailyreckoning.com:

All the talk about Russian tampering with the 2016 presidential election, which is vastly overstated by the way, diverts attention from the more fundamental problem:

The vulnerability of America’s critical infrastructure to cyberattack by hostile actors.

When I say critical infrastructure, I mean the power grid, hydroelectric systems, nuclear power plants, energy pipelines, railroads, air traffic control systems, internet and stock exchanges.

These are large, complex systems that affect the entire country. And they are computerized and automated like never before. The scale and degree of interconnectedness are increasing, which creates great vulnerabilities.

If any of them fail, it could lead to massive disruptions, panic and social unrest.

Look at the chaos that followed Hurricane Katrina in 2005, for example. That was an interesting case study in what I call the veneer of civilization and how quickly it can break down under emergency conditions.

Imagine what would happen, for example, if a virus implanted in the control system of a hydroelectric dam opened floodgates to inundate downstream targets, killing thousands by drowning and destroying bridges, roads and agriculture.

Meanwhile, hackers have targeted nuclear power plants. Last year alone, government sources say a dozen U.S. nuclear power plants were targeted, possibly by Russian hackers.

Now, the operations of most nuclear power plants use older analog systems, so they aren’t vulnerable to cyberattacks. They aren’t connected to the net. It’s one case where older and less sophisticated is better.

But hackers are extremely creative, and increasing digitization of these plants could allow hackers backdoor entry points into critical operating systems. I don’t need to spell out the possibilities.

Or think of what would happen if the power grid went down for an extended stretch. Imagine what it would mean for air travel if air traffic control systems were down for a long period.

That’s just for starters.

To continue reading: The Looming Crisis You’re Not Hearing About

Stocks Soared on Trump’s $1-Trillion Infrastructure Boom. But that Just Evaporated. Now What? by Wolf Richter

Trump’s budget proposal certainly does not contain funding for an infrastructure boom. That might be tacit recognition that a nation $20 trillion in the hole can’t really afford an infrastructure boom, not unless it gives up something else, like making war in faraway places. From Wolf Richter at wolfstreet.com:

Wall Street will have to go look for another mirage to hype.

During the campaign, President Trump explained that he’d fire up the economy and create jobs by spending $1 trillion on infrastructure. It’s in terrible shape and needs some big spending. It might have been material for rare bipartisan agreement.

The stock market has soared since the election, counting on this $1 trillion in new federal spending and “pricing it in.” Infrastructure stocks were hot. But by the looks of it, some folks are going to end up holding the bag…

Because there is not a trace of this huge spending plan in the 2018 budget blueprint released by the White House on Thursday. Instead, the blueprint slashed the budget of the Department of Transportation by 13% and cut out some existing plans for infrastructure spending.

Yet on February 12 — just days before the first efforts to defund existing infrastructure projects began to seep to the surface — I wondered incredulously if Trump and California “suddenly see eye-to-eye on high-speed rail,” because Trump, still brimming with enthusiasm about infrastructure spending, had told aviation CEOs this encouraging tidbit:

“And we have an obsolete plane system, we have obsolete airports, we have obsolete trains. We have bad roads. We’re going to change all of that, folks. You’re going to be so happy with Trump. I think you already are.”

And when the stock market opened in Japan, a major supplier of train system to the US, this happened… Trump Promises “Fast Trains,” Japan’s Railway Stocks Soar.

Days later, everything changed. In mid-February, the Department of Transportation announced that it would withhold its portion – $647 million – of funding for the Caltrain Electrification project. Caltrain runs 45 miles between San Francisco and San Jose in parallel with the awfully congested Highway 101, straight through Silicon Valley, a stretch that generates 14% of California’s GDP, and where 43% of the venture capital of the US is invested.

To continue reading: Stocks Soared on Trump’s $1-Trillion Infrastructure Boom. But that Just Evaporated. Now What?