China has the world over a barrel in more ways than we have actually been led to believe.
It isn’t a lot that China has the biggest resources of these minerals. Rather it has the refining capability to produce these materials. Note that most of these “lower known base metals “don’t happen naturally by themselves (like copper or tin), rather they occur concurrent with other minerals and are essentially a by-product of refining typical base metals. Of course, refining minerals is a messy, contaminating, and energy intensive company that couple of nations want to engage or permit. In doing so, they open themselves approximately national security concerns.
All rather intriguing, but what I want to mention is that there exists the likelihood that this all becomes weaponised. Lowering or completely removing supply of these important resources to “non-friendly” countries is progressively ending up being a real hazard. That in itself would involve substantial supply interruptions, greater costs of production (much higher), and subsequent acceleration of stagflation.
The New vs the Old Economy
We thought we had all of it before with the TMT bubble of 2000 (goodness, that is now 23 years ago). However history has actually been reworded highlighting the extreme efficiency of one theme against another. Real assets are more out of favour compared to financial assets than at any time because the 1920s. Some random charts we found on the details superhighway supplying illustrative view of what we’re saying.
Any relationship in the chart above to the one
below? OK, let’s put it another way. What if the US 10-year yield is 10% 10 years from now? How do you think real properties would have performed vs financial properties?
Just a pointer of how out of favour products and energy are compared to the wider market. Approved this is some 12 months old, however very little has actually changed since then.
We recall a number of years ago when Tesla had a greater market cap than the S&P 500 energy sector and Microsoft had bigger market cap than the S&P Materials and Energy sectors integrated. Seems like not much has changed on a global scale.
Getting Saudi Aramco, Microsoft, and Apple have about the very same market cap as the worldwide energy sector.
A Believe Piece on Solar Panels
Finally someone who has dug deep into the assumptions:
You truly have to check out the post. It’s a humdinger. But initially, an alerting to the tree huggers who buy the principle that paying more taxes to multiple home owning, jet setting globalists in order to get rid of a gas that is 0.04% of the environment and for which all plants depend on. My friends and coworkers over at International Male said it well:
However back to the report. Have a look at these snippets: Last August, in an amalgamation of “The Green New Offer” fulfills “Build Back Much Better,” President Joe Biden’s Inflation Decrease Act talented the renewables industry with billions of dollars worth of taxpayer-funded subsidies.
What couple of backing the costs understood was that the biggest recipient would likely be China due to its expansive grip on the global solar photovoltaic (PV) market. Even worse than that, it may end up misdirecting the world’s tidy energy efforts into dirtier than appreciated energy technologies since of the nation’s continuous reliance on coal-fired energy.
In essence, the IEA are basing their presumptions of how much CO2 is produced in manufacturing photovoltaic panels based upon European energy information rather than Chinese energy data. China counts on coal more intensively than Europe:
the IPCC declares solar PV is 48 gCO2/kWh. However, as we’ll see below, a brand-new examination started by Italian scientist Enrico Mariutti recommends that the number is better to in between 170 and 250 gCO2/kWh, depending on the energy mix used to power PV production. If this quote is accurate, solar would not compare favourably with natural gas, which is around 50 gCO2/kWh with carbon capture and 400 to 500 without.
Here is the conclusion:
A picture emerges of an aspirational Western market recorded lock, stock, and barrel by deceptive, coal-loving Beijing. It’s a worry for the West’s financial development, never ever mind energy security and environment action. If solar is anything to go by, the fantastic shift appears less based upon data than a mixture of blind faith and beneficial interests.
Perhaps the broad populace will awaken to this blind faith when electrical energy prices go through the roof and requirements of living decrease substantially. In either case, the fact will eventually come into plain sight.
Reports of Its Death Are Considerably Exaggerated
Here’s a really helpful resource: https://yearbook.enerdata.net/coal-lignite/coal-world-consumption-data.html Take a look at international consumption of coal in 2022: China, India, Russia, Indonesia, South Africa, Turkey(and other emerging countries) make up about 86% of world coal consumption. Don’t be expecting them to purchase into the “Net No” narrative anytime soon (this side of 2050 at least). In any case, coal consumption will continue to increase in line with global GDP. There is no other method around this. That is unless those countries want to see a wear and tear in standards of living … which, as I sit in Turkey, I can inform you ain’t gon na take place without a fight.
By the method, here is worldwide oil production by country.
Notice the significance of the US … or need to we say US shale, because some 66% of US oil production is accounted for by shale oil. If shale is certainly peaking (or possibly it has currently peaked) as our company believe it is (we have actually written about this formerly and extensively), then we have ourselves a distinct and long-performing investment chance.
Editor’s Note: The Western system is undergoing considerable modifications, and the indications of ethical decay, corruption, and increasing debt are impossible to disregard. With the Great Reset in motion, the United Nations, World Economic Forum, IMF, WHO, World Bank, and Davos guy are all promoting a merged program that will impact us all.
To get ahead of the turmoil, download our totally free PDF report “Clash of the Systems: Thoughts on Investing at an Unique Time” by click on this link.