Category: Economy

Their socialist rhetoric starts to fall on deaf ears when the economy comes into play. It’ll have even less attention paid to it when people are trying to pay their utility bills this winter to stay warm.

Congressional Squad Members, AOC and Tlaib ‘Debunk’ Facts With Nasty Threats

Last week, during a House environmental hearing, Republican Congressman Clay Higgins of Louisiana laid a haymaker on the Democrats’ star environmental witness, Raya Salter. The witness isn’t a scientist, she’s a lawyer. Before she was a lawyer, she was a community organizer.

Higgins asked some basic, objectively obvious questions of Ms. Salter, but the star flamed out.

Higgins pointed out that everything around Salter from her cell phone to the table at which she was sitting was [born] from petrochemical products.

Instead of answering, she hectored Higgins with platitudes and entreaties to “search his heart” and to “ask his God what you are doing to the Black and poor of Louisiana.” If you were unaware, oil in particular, and energy, in general, are racist.

She got progressively angrier as Congressman Higgins pressed her for an answer — any answer that made sense. Higgins then asked what she would do with ocean-going vessels and the maritime industry. Presumably, she knew that other than US Carriers, and submarines that run on nuclear plants, ships of sea run on oil. She was flabbergasted. She launched back into her harangue about shutting down petrochemicals entirely, avoiding the obvious: that we can’t unless we want to go back to sailing ships and slaughtering whales for lamp oil.

What do you do with air travel?

YOU, SIR, NEED TO SEARCH YOUR HEART! The fossil fuel industry is destroying the earth and the natural world, and that is a fact, sir!

AOC is on the committee and launched into one of her “the worst displays of misogyny” rants at Higgins for daring to ask Salter questions she couldn’t answer. According to AOC, the world is ending in eight years, so one can understand Salter’s urgency to transition back to wooden ships and sail.

This week, another squad member, Rashida Tlaib wanted a moment in the sun to pad her environmental cred with ridiculous questions posed to bankers. She wanted commitments from all of the witnesses that their banks would refuse to lend to the oil industry. Unlike Salter, the panel consisted of reasoning adults, not harpies. The first banker asked was Jamie Dimon, of JPMorgan Chase, the largest of the Big Four banks.

Tlaib: “Does your bank have a policy against funding new oil and gas products, Mr. Dimon?”

Dimon: “Absolutely not, that would the road to hell for America”

Tlaib: “Yeah, that’s fine. You know what, sir, everybody who got relief from student loans and have (sic) accounts with your bank should probably take their account and close their account”

None of the other banks were quite as short and direct as Dimon but the message from the adults was clear: No, we won’t stop lending to the oil industry.

Without oil, everything grinds to a halt. We saw what happened when gas prices simply jumped. If the oil industry stopped because they couldn’t produce, the world economy would collapse in short order. The ore for batteries that Tlaib thinks will “save the planet” gets taken out of ore pits by monstrous earth movers running on diesel. All the ships bringing products to distant shores run on diesel. Trucks run on diesel.

For the foreseeable future, the world will run on oil. No ranting at Congressmen asking basic questions, or a congresswoman badgering bankers is going to change that fact.

Where’s Transportation Secretary Pete Buttigig?

Freight Train Strike: The Biggest Looming Crisis You’ve Heard Almost Nothing About.

On the menu today: Starting sometime Friday — perhaps as early as just after midnight — U.S. freight-rail workers could go on strike or experience a lockout, and the economic consequences could be far-reaching. What Americans may only be realizing now is that in some ways, the effects of a strike are already here, as freight companies have already halted certain shipments in preparation for a potential strike, and Amtrak has suspended certain routes. Your commuter rails may not be running Friday morning. Also, a farewell to Ken Starr, and a long, fun talk with an old friend.

Why You Should Care about a Freight-Rail Strike

We live in a country where the (currently) ruling political party and most of the national media have a symbiotic relationship. (Jen Psaki started work at NBC News this week.) One of the problems with this dynamic is that when the ruling class decides something is important — say, emphasizing the issue of abortion as the midterm elections approach — it tends to squeeze out everything that the ruling party doesn’t want emphasized.

Don’t get me wrong; abortion is a hugely important issue to many Americans. You can read more about the abortion bill South Carolina senator Lindsey Graham proposed yesterday from Alexandra DeSanctis and Charlie Cooke and John McCormack and Kathryn Jean Lopez.

But there are a lot of other things going on in this world, and one issue that seems spectacularly under-covered — a ticking time bomb, if you will — is that starting at 12:01 a.m. Friday, about a day and a half from now, if there isn’t a new labor deal between freight-rail unions and employers, the U.S. economy will be . . . derailed.

Maybe there will be an eleventh-hour deal; I suspect many casual observers simply assume that a deal will get done because the consequences of even a brief work stoppage would be so far-reaching. But freight companies are already halting certain shipments in preparation for a potential strike, so in some ways, the consequences of a strike are already here.

The American Association of Railroads said this week that it’s begun taking steps to secure the shipments of hazardous and security-sensitive materials, such as chlorine used to purify drinking water and chemicals used in fertilizer. It also warned that “other freight customers may also start to experience delayed or suspended service over the course of [this] week, as the railroads prepare for the possibility that current labor negotiations do not result in a resolution and are required to safely and securely reduce operations.”

At noon today, Norfolk Southern will close all gates to intermodal traffic — that means anything using multiple modes of transportation such as rail, ship, aircraft, and truck. BSNF Railway, one of the largest freight railroads in North America, stopped accepting intermodal traffic as of 12:01 a.m. this morning.

Amtrak has already suspended most cross-country routes and announced that, “It will only operate trains that can reach their final destination by 12:01 a.m. on Friday, when a freight rail strike or lockout could begin.” Without a deal, most Amtrak operations in California will be suspending operations starting on Thursday.

A freight-rail strike will also bring commuter-rail services to a halt in some areas: “Virginia Railway Express said if there is a strike it would immediately stop all of its commuter train service because Norfolk Southern owns the tracks for VRE’s Manassas Line, and CSX owns the tracks for its Fredericksburg Line.” Across the Potomac in Maryland, “Since CSX owns and maintains the Camden and Brunswick lines in addition to dispatching MARC trains, any labor strike would result in the immediate suspension of all MARC Camden and Brunswick Line service until a resolution is reached.” It’s the same story for Metra, the commuter-rail system serving the city of Chicago and its surrounding suburbs, and Metrolink, the commuter-rail service that serves southern California.

The U.S. Department of Transportation estimated that a freight-rail strike would cost the economy about $2 billion a day, but that’s just a big, abstract figure in most people’s minds. What Americans will notice is all kinds of products getting scarcer and more expensive (again).  As our Dominic Pino notes, crude oil, natural-gas liquids, refined products, petrochemicals, and plastics are transported by rail, meaning that a disruption in freight-rail service is likely to spur a gas-price increase (again). The average price for a gallon of regular unleaded gas nationwide is currently $3.70, which is better than the $5 per gallon price of mid June, but it’s still high by historical standards.

Once again, if you read local press or trade publications, you realize how many things in this country grind to a halt if there’s a freight-rail strike. From EnergyWire:

Chemicals make up the second-largest category of rail freight after coal — 55,000 carloads a week — and there aren’t enough trucks and barges to handle the volume, said Jason Miller, a professor in the department of supply chain management at Michigan State University.

A prolonged strike would have a bigger impact on the economy than the shutdowns during the Covid-19 pandemic, Miller said.

“At least during Covid, you able to keep [chemical] production going, oil production going,” he said. “You can’t do that with a rail strike.”

Farmers have a limited window to get their harvested crops to buyers before the food spoils, and for many crops, this is harvest time; farmers are now wondering if the usual rail options will be available after Friday:

A painful example of supply chain concern can be found in soybean farming. Hungry markets in Asia and elsewhere count on soybeans to make the ships in the Gulf of Mexico and the west coast.

“It’s gonna be devastating because just about all of the soybeans that are produced here go to a crush plant, and that crush plant is in Hastings, and they send two unit trains of soybean meal per week to the Pacific Northwest,” Greving said. He sits on the USDA United Soybean Board. “That is loaded on bulk vessels there and shipped to Southeast Asia.”

The price of oil affects everybody, farmers included. A rail shutdown would also stop the delivery of corn to most ethanol plants.

Remember, many of the world’s food markets are still reeling from the effects of the Russian invasion of Ukraine and the near-complete shutdown of Ukraine’s food exports.

Yesterday, I briefly mentioned that a strike could disrupt the flow of coal to power plants. Grist lays out why there aren’t any realistic alternatives to get coal to those plants:

Because the fuel is so heavy and takes up so much space, rail is the only economical way to transport it from mines to power plants: The average coal train consists of 140 cars that each hold about as much coal as could fit on ten trucks. Even if coal could be shifted onto trucks, the trucking industry itself has also been experiencing labor shortages, and there’s not much excess truck capacity to absorb rail freight. . . .

“Coal stockpiles are already at historic lows in the United States,” said [John Ward, the executive director of the National Coal Transportation Association, a trade group representing coal shippers and buyers]. “Any further interruptions could be disastrous for power generation.

In the good old days, it wasn’t uncommon for utilities to have a 60- or 90-day supply of fuel, but I don’t know anybody who has that luxury now. If it became an extended strike, the consequences could be dire.” Should utilities burn through their stockpiles, they’ll have to slow down generation to save supply, which could lead to power shortages during times of peak demand. Prices would jump for as long as the supply backlog lasted.

The worst-affected places would be states like West Virginia and Missouri, which generate around 90 percent of their electricity from coal and don’t have the opportunity to switch to natural gas on short notice. Even states with large gas supplies will struggle, though, since gas markets are also tight as producers export large quantities of gas to Europe.

In case you’re wondering, no, trucks cannot pick up the slack. The American Trucking Association says it simply doesn’t have the spare trucks or manpower. “Idling all 7,000 long distance daily freight trains in the U.S. would require more than 460,000 additional long-haul trucks every day, which is not possible based on equipment availability and an existing shortage of 80,000 drivers,” ATA president and CEO Chris Spear wrote in a letter to Congress. “As such, any rail service disruption will create havoc in the supply chain and fuel inflationary pressures across the board.”

In other words, the strike scheduled to begin in, what, 36 to 40 hours after you read this, would be a far-reaching economic calamity.

And, in the eyes of some analysts, the country is in this spot because of the Biden administration’s decision-making, which aimed to maximize the leverage of its union allies:

“That this might occur right before the midterm elections is entirely self-inflicted by the Biden administration, where two of President Biden’s National Mediation Board [NMB] members took the bizarre step in June of terminating board-guided mediation two months early and starting the 90-day countdown to a possible rail strike,” Scribner told FOX Business, calling the move “unprecedented.”

If the NMB had stuck to the original schedule, Scribner says, the cooling-off period would have ended in mid-November. But instead, the board decided to cut things short.

If this was indeed some deliberate Biden administration strategy, you must wonder how well it thought this through, or whether the administration’s plan counted on a deal being reached by now. Because if there’s anything we know Joe Biden is loath to do, it’s suspending Amtrak service.

By the way, the potential railroad strike is mentioned in the 29th paragraph of today’s newsletter over at Politico. Today’s Axios newsletter does not mention the potential strike at all.

If demoncraps and their mainstream media apologists are really caught off guard by this stuff, maybe they shouldn’t be in charge of running things and maybe our mainstream media needs to be replaced by people who know what they’re talking about.

And the U.S. goobermint still ran a multiTrillion dollar deficit

Americans Spent More on Taxes Last Year Than on Food, Health Care, Education, and Clothing Combined.

Yikes. New consumer spending data from the Bureau of Labor Statistics (BLS) provides some sobering perspective on how much Americans are paying in taxes. The data covers consumer spending across a wide variety of categories in 2021. Overall, taxes accounted for about 25 percent of average consumer spending.

The BLS measures spending per “consumer unit,” which it describes as “either (1) all members of a particular household who are related by blood, marriage, adoption or other legal arrangements; (2) persons living alone or sharing a household with others or living as a roomer in a private home or lodging house or in a permanent living quarters in a hotel or motel, but who is financially independent; or (3) two or more person living together who use their income to make joint expenditure decisions.”

On average, each “consumer unit” paid more than $16,000 in taxes last year. This outpaces average spending on food, clothing, education, and health care combined.

The mean for total spending per unit on health care, food, education, and clothing was $16,721.42. This included an average of $8,289.28 on food, $5,451.61 on health care, $1,226.14 on education, and $1,754.39 on apparel.

The mean for total spending per unit on taxes was $16,729.73. This included $8,561.46 in federal income tax, $2,564.14 in state and local income taxes, $2,475.18 in property taxes, $5,565.45 in Social Security deductions, and $105.21 in other taxes, offset by an average stimulus payment of $2,541.71.

In addition to this disturbing tidbit, the new BLS data contains a wealth of other information on American spending habits and offers an interesting glimpse at recovery—and inflation—during the second year of the coronavirus pandemic.

“Average annual expenditures for all consumer units in 2021 were $66,928, a 9.1-percent increase from 2020,” BLS reports. “During the same period, the Consumer Price Index…rose 4.7 percent, and average income before taxes increased 3.7 percent.”

The highest expenditure category was housing, at an average $22,623.55 per consumer unit (including property taxes). Major spending categories aside from housing, food, health care, education, and clothing included transportation ($10,961.18), utilities/fuels/public services ($4,223.49), entertainment ($3,567.89), household operations ($1,638.42), and personal care products and services ($770.51).

Spending was up last year in all sorts of categories that had been depressed by the pandemic in 2020. For instance, spending on entertainment was up nearly 23 percent over 2020 and up 15.5 percent from 2019.

The average spending per consumer unit on alcohol was $553.77, up 15.9 percent over 2020 (but still below 2019 levels). “The increase was driven by alcohol away from home spending, up 69.4 percent, which was offset by a decrease in alcohol at home spending, down 7.9 percent,” the BLS reports.

Overall, spending was up across all income categories. The highest quintile of earners had the most increase in spending (up 11.6 percent), while the second-lowest quintile had the smallest increase (up 4.6 percent). “In each quintile, the increase in total spending outpaced the increase in income,” notes the BLS. “Overall average annual income before taxes rose 3.7 percent in 2021, while expenditures increased 9.1 percent.”

Income rose between 3 and 4 percent for the top three income groups but just 0.6 percent for the second lowest income group. It decreased 0.4 percent for the bottom quintile.

THE HOT & COLD ECONOMY

F. Scott Fitzgerald wrote that “the test of a first-rate intelligence is the ability to hold two opposing ideas in mind at the same time and still retain the ability to function.” George Orwell labeled the ability doublethink or indoctrination. Psychologists call it cognitive dissonance. I call it the current economy.

There are mixed signals everywhere. Inflation is running hot at an 8.5% annual rate—subtract food and energy and it’s 5.9%. Despite a string of long-overdue Federal Reserve rate hikes, credit is still loose and will be until short-term rates rise above inflation. At 2.25% to 2.5%, we have a way to go.

Prices are popping. Restaurants everywhere seem to have New York prices. Haircuts are more. Same for doctor’s bills, furniture and Uber rides. There’s still $5 rotisserie chicken, and the $1.50 hot-dog special, but it sure feels like Costco added a couple of bucks to every other item.

More heat: The U.S. economy added 315,000 jobs in August, and unemployment is 3.7% as workers are hard to find for the 11.2 million available jobs. Stores are closing or limiting hours owing to a lack of workers. And unionization is back, burdening Amazon, Starbucks and even Google’s cafeteria. A national railroad strike might hit soon.

Once wage hikes start, they are hard to stop. John Deere increased workers’ pay by 10% last November. Lowe’s is giving out $55 million in bonuses this quarter. I expect more pay increases of 10% to 15% over the next year. The new- and used-car market is still tight because of chip shortages, but that’s almost over. Container ships now are idling outside East Coast ports, as I observed flying into New York recently. Hot, hot, hot.

Policy makers keep pouring gasoline on the inflation bonfire. California Gov. Gavin Newsom signed a law that would increase fast-food worker wages up to $22 an hour next year from $15. Expect 20% price increases, even for In-N-Out Burger’s “Animal Style” fries. After trillion-dollar spending binges in 2020 and 2021, Congress has piled on spending with the Inflation Reduction Act, a misnomer for a green pork bill, plus the unnecessary Chips+ Act with even more green goodies. And the Biden administration’s wave-of-the-hand student-loan forgiveness will have the same effect as sending out $10,000 and $20,000 stimulus checks. Fire in the hole.

But there are plenty of signs that the economy is weakening, most visibly at gas pumps. To whip inflation, rate hikes are becoming common. Chairman Jerome Powell said last month the Fed would take “forceful and rapid steps to moderate demand,” which might “bring some pain to households and businesses.” Ouch.

Beyond interest-rate bumps, the Fed is sitting on $9 trillion in reserves and running off $95 billion a month in Treasurys and mortgages. You can do the math: It will take five to seven years of quantitative tightening to return to more “normal” reserves. Continuous pain.

The average 30-year fixed-rate mortgage is now 5.9%, up from 2.9% a year ago. No wonder housing prices are dropping in many markets. Worse, new housing starts are headed south as mortgage payments become unaffordable for new buyers. This means construction job losses and lower demand for lumber, pipes, etc.

From Walmart to Target to Nordstom, retailers over-ordered and now face a glut of product. They are slashing prices to move it, even renting shipping containers to store their overstuffed inventory.

The pandemic and working from home pumped PC and laptop demand, but that is now cratering. Same for Peloton. Zoom usage is weakening. Chipmaker Nvidia announced a 17% shortfall in its sales outlook. Even Google had an earnings miss. Re/Max, Snap, Netflix, JPMorgan and many others are laying off employees.

Europe is a mess, with 10% or higher inflation in some countries. U.K. pub owners complain that their electricity bills are tripling. The Nord Stream pipeline is shut down, and winter is coming. China may be a bigger mess, with its flat-lining economy. While zero-Covid lockdowns are partly to blame, real estate may be in a death spiral, with Evergrande-like defaults and loss of customer prepayments that could require massive bailouts.

Won’t all these weak economic signs douse the hot economy, killing inflation and allowing the Fed to stop raising interest rates? That mythical “soft landing”? I’m skeptical. Not to be a gloomy Gus, but here’s another scenario: Inflation persists. Rates rise. Credit tightens. Housing values drop. Corporate earnings miss. Recession continues. Earnings multiples contract. Layoffs accelerate. Wages stagnate. Then and only then will the Fed start lowering rates. That could happen in 2023, but it’s more likely to happen closer to the 2024 election.

Maybe understanding the economy’s mixed signals doesn’t require Fitzgeraldian intelligence or Orwellian indoctrination. The signals cause psychological dread, like walking a tightrope across Niagara Falls (slowly I turned . . .). Cognitive dissonance makes decision-making difficult. The stock market might continue to yo-yo up and down thousands of points, maybe for years, as investors hold two competing thoughts, boom or bust, in their heads—until one thought prevails.

‘Why shouldn’t it be as bad as the 1970s?’: Historian Niall Ferguson has a warning for investors.

  • Historian Niall Ferguson warned Friday that the world is sleepwalking into an era of political and economic upheaval akin to the 1970s — only worse.
  • Speaking to CNBC at the Ambrosetti Forum in Italy, Ferguson said that the catalyst required to spark a repeat of the 70s — namely inflation and international conflict — had already occurred.
  • “The ingredients of the 1970s are already in place,” Ferguson, Milbank Family Senior Fellow at the Hoover Institution, Stanford University, told CNBC’s Steve Sedgwick.

‘Much worse than the 1970s’

Historian Niall Ferguson warned Friday that the world is sleepwalking into an era of political and economic upheaval akin to the 1970s — only worse.

Speaking to CNBC at the Ambrosetti Forum in Italy, Ferguson said the catalyst events had already occurred to spark a repeat of the 70s, a period characterized by financial shocks, political clashes and civil unrest. Yet this time, the severity of those shocks was likely to be greater and more sustained.

“The ingredients of the 1970s are already in place,” Ferguson, Milbank Family Senior Fellow at the Hoover Institution, Stanford University, told CNBC’s Steve Sedgwick.

“The monetary and fiscal policy mistakes of last year, which set this inflation off, are very alike to the 60s,” he said, likening recent price hikes to the 1970′s doggedly high inflation.

“And, as in 1973, you get a war,” he continued, referring to the 1973 Arab-Israeli War — also known as the Yom Kippur War — between Israel and a coalition of Arab states led by Egypt and Syria.

As with Russia’s current war in Ukraine, the 1973 Arab-Israeli War led to international involvement from then-superpowers the Soviet Union and the U.S., sparking a wider energy crisis. Only that time, the conflict lasted just 20 days. Russia’s unprovoked invasion of Ukraine has now entered into its sixth month, suggesting that any repercussions for energy markets could be far worse.

“This war is lasting much longer than the 1973 war, so the energy shock it is causing is actually going to be more sustained,” said Ferguson.

2020s worse than the 1970s

Politicians and central bankers have been vying to mitigate the worst effects of the fallout, by raising interest rates to combat inflation and reducing reliance on Russian energy imports.

But Ferguson, who has authored 16 books, including his most recent “Doom: The Politics of Catastrophe,” said there was no evidence to suggest that current crises could be avoided.

“Why shouldn’t it be as bad as the 1970s?” he said. “I’m going to go out on a limb: Let’s consider the possibility that the 2020s could actually be worse than the 1970s.”

Among the reasons for that, he said, were currently lower productivity growth, higher debt levels and less favorable demographics now versus 50 years ago

“At least in the 1970s you had detente between superpowers. I don’t see much detente between Washington and Beijing right now. In fact, I see the opposite,” he said, referring to recent clashes over Taiwan.

The fallacy of global crises

Humans like to believe that global shocks happen with some degree of order or predictability. But that, Ferguson said, is a fallacy.

In fact, rather than being evenly spread throughout history, like a bell curve, disasters tend to happen non-linearly and all at once, he said.

“The distributions in history really aren’t normal, particularly when it comes to things like wars and financial crises or, for that matter, pandemics,” said Ferguson.

“You start with a plague — or something we don’t see very often, a really large global pandemic — which kills millions of people and disrupts the economy in all kinds of ways. Then you hit it with a big monetary and fiscal policy shock. And then you add the geopolitical shock.”

That miscalculation leads humans to be overly optimistic and, ultimately, unprepared to handle major crises, he said.

“In their heads, the world is kind of a bunch of averages, and there aren’t likely to be really bad outcomes. This leads people … to be somewhat overoptimistic,” he said.

As an example, Ferguson said he surveyed attendees at Ambrosetti — a forum in Italy attended by political leaders and the business elite — and found low single-digit percentages expect to see a decline in investment in Italy over the coming months.

“This is a country that’s heading towards a recession,” he said.

The “Great Reset”: A Blueprint for Destroying Freedom, Innovation, and Prosperity

  • Notice that no nation has managed merely to print money and tax its citizens on the path to prosperity. Real wealth cannot simply be conjured from thin air. There must be recognized value in what a nation and its citizens possess.
  • More than any other source for national wealth, however, one towers above the rest: innovation. The ability of the human mind to create something new and valuable provides society with endless wealth creation…. Innovation is the magic sauce for generating wealth.
  • Humans struggling merely to survive in the world do not waste time, labor, or resources on projects that offer no prospect for future reward. Humans working as servants to the state under centrally controlled economies have no incentive to innovate. Only when private ownership and personal liberty combine can human innovation flourish. Freedom is the secret ingredient to innovation’s magic sauce for increasing wealth.
  • A country whose institutions do not respect property rights or whose customs do not value freedom will remain a barren desert for human innovation. In this way, nations have a great incentive to liberalize over time. Should they not, they quickly become financially and militarily vulnerable to more innovative and wealthier nations. Observing this simple truth, classical liberals have always understood free markets as the gateway to human emancipation. Economic self-interest, in other words, ultimately leads to expansive human rights and liberties across the planet.
  • Nothing about Western politicians’ embrace of the World Economic Forum’s “Great Reset” or “Build Back Better” paradigms protects property rights or liberty in the slightest. The WEF’s agenda promotes radically anti-liberal programs… [that] will smother human innovation by first depriving Westerners of their freedoms.
  • Wealthy free nations are a threat to the WEF’s New World Order. If censorship must be embraced to control the “narrative,” then so be it. If citizens must be denied freedom of movement under the guise of a “health emergency,” no big deal. If private bank accounts must be seized to intimidate protesters, then such threats are the price for ensuring compliance. In this way, the WEF’s plans for a controlled economy intentionally reverse centuries of liberal progress. Political leaders today are dragging the West into the past.
  • First, individual liberties will continue disappearing. Then, the greatest economic engine of all, innovation, will dry up. Finally, wealth will return solely to the hands of a small “ruling class” minority. This is the future the World Economic Forum hails as “progress.” It is not. It is a recipe for human bondage.
Pictured: WEF founder and executive chairman Klaus Schwab in Davos on May 23, 2022. (Photo by Fabrice Coffrini/AFP via Getty Images)

(It’s nice when they provide a picture for positive ID

Continue reading “”

US NatGas Hits 14-Year-High, EU Benchmarks Explode Higher.

US natural gas futures surged to a new 14-year high this morning as European prices spiked on Russia’s move to shut a major pipeline (for “planned maintenance”), sparking increased fears that demand for American exports of the heating and power-plant fuel will soar when Freeport’s LNG Terminal comes back online in October.

Additionally, the next few months of the US NatGas curve are in contango with November 2022, December 2022, and January 2023 all traded above $10 this morning…

In Europe, benchmark gas futures rose as much as 20% to new record highs…

…driving electricity prices to fresh records, topping EUR700/mWh for the first time ever…

As Bloomberg reports, the key Nord Stream pipeline will stop for three days of maintenance on Aug. 31, again raising concerns that the conduit won’t restart as planned after the work.

“Whether the reasoning is true or not, the outcome drives a European gas market that tightens further, and one that is left reliant on demand curtailments to find itself in balance,” said Biraj Borkhataria, an analyst at RBC Capital Markets.

“The market may disregard Gazprom’s comments and start to consider whether the pipeline may not return to service, or at the very least may be delayed for any given reason.”

European authorities have repeatedly warned of the possibility of a total shutdown of Russia supplies as Moscow retaliates for sanctions imposed because of its invasion of Ukraine.

“The catastrophe is already there,” Thierry Bros, a professor in international energy at Sciences Po in Paris, said.

“I think the major question is when EU leaders are going to wake up.”

Finally, some context for what all this means.

EU NatGas is trading at an oil equivalent price of $500 per barrel and while EU NatGas is at 14 year highs (around $167 per barrel equiv), Europe’s cost is triple that!!

Both of which would suggest a very significant pressure for producers to transition from gas to crude as source. For now, oil prices are down on more Iran ‘deal’ headlines.

The Great Reset: Testing, Testing…

It is disturbing to note that the greater portion of the public do not seem to be aware of the vast ideological movement for social transformation called the Great Reset. Those who are at least partially informed consider it merely another conspiracy theory. Some among the so-called elite—the media, the academy, the political stratum—consider the Great Reset as a rational and benevolent response to the specter of overpopulation and the threat of populist uprisings. Others among the patrician class, doubtless a majority, are engaged in promoting what they know to be a concerted attempt to destabilize and supplant the long-established order of ideally democratic governance that has slowly and incrementally characterized the liberal societies of the West, dating from the Magna Carta (1215) and the Peace of Westphalia (1648) to the approximate present.

We should make no mistake about this. The revolutionary project, whether denominated as the New World Order, the U.N.’s Agenda 2030, or the Davos-centered Great Reset—different terms for essentially the same impetus—under the influential leadership of Klaus Schwab is apocalyptic in its aims. It envisages a world in which the middle-class will have been expunged, the global census markedly winnowed, and a China-like social credit system introduced in which citizens will be under constant digital surveillance determining what they are allowed to possess, rent, use or spend.

Dr. Strangelove, I presume.

Those who are skeptical that a novel and destructive global dispensation actually exists and is already being installed need only observe recent developments in the social, economic and political world we have long taken for granted as normative. Years of media censorship, tainted elections, the presumably scientifically- backed hallucination of global warming or “climate change,” and consequent government policies shrinking the Constitutional space of individual autonomy, business as usual, and entrepreneurial initiative represent the first phase of authoritarian control.

Continue reading “”

Brazils’ Gun Economy Thriving Under President Bolsonaro

Brazilian President Jai Bolsonaro supports a civilian “army” by implementing looser gun policies, allowing many to own firearms.

The 67-year-old ex-army captain promised the country to “give my life to defend our freedom.” And now, one way he’s reportedly doing that is by allowing Brazilians to have an accessible process for gun ownership.

Wagner Carneiro, a former Brazilian army sergeant, said he needed the gun to protect his family. Carneiro cited a previous incident when a man asked for random directions and then suddenly pointed a gun to his head and stole his mobile phone. He believes that with a weapon, incidents like these would be more preventable.

Many are thanking Bolsonaro after the implementation of the new policy as the country loosens restrictions on gun ownership for civilians.

“Expanding the right of the population to bear arms has been one of Bolsonaro’s main electoral promises from day one,” says Fábio Zanini, a columnist for Folha de S.Paulo, a leading Brazilian newspaper. “Gun owners are one of his main electoral bases.”

Schutzenfest
Schutzenfest Poster (Source: Schützenfest Jaraguá/Facebook)

Aside from Brazilians expanding their interests around gun ownership, a lot of private-owned gun stores are thriving. In addition, there are various shooting tournaments happening all over Brazil, including the large-scale Schützenfest, where nationals of German descent can join and participate. The event will also include beer-drinking parades like Oktoberfest (but with guns).

Continue reading “”

BLUF
So leave us alone, you centralisers; you worshippers of Gaia; you sacrificers of the wealth and property of others; you would-be planetary saviours; you Machievellian pretenders and virtue-signallers, objecting to power, all the while you gather it around you madly.

Leave us alone, to prosper or not, as a result of our own choices; as a result of our own actions; in the exercise of our own requisite and irreducible responsibility.

Leave us alone. Or reap the whirlwind. And watch the terrible destruction of what you purport to save, in consequence.

Peddlers of environmental doom have shown their true totalitarian colours

transcript:

Continue reading “”

Dutch Farmer Protests Reap Populist Support

Barneveld (Netherlands) (AFP) — Dutch farmers’ rowdy protests against government climate plans have caused a stir at home and abroad, with populists worldwide jumping on the bandwagon and even former US president Donald Trump backing them.

“We take all the support that we can get,” says Jaap Kok, a 62-year-old cattle farmer standing in a meadow full of cows near Barneveld in the central Netherlands’ farming belt.

The farmers have wreaked havoc for weeks, dumping manure and garbage on highways, blockading supermarket warehouses with tractors and rallying noisily outside politicians’ houses.

They oppose plans to cut emissions of nitrogen in the Netherlands — the world’s second-biggest agricultural exporter after the United States — by reducing livestock and closing some farms.

Continue reading “”

BLUF
As all Canadians know, the Prairies are the breadbasket of Canada, and if the provinces rebel against Trudeau’s fertilizer reduction scheme, there’s almost no way it can be enforced. Hopefully, this means Trudeau will give up, but only time will tell.

All Three Prairie Provinces Says No to Trudeau’s Starvation Policy

The Prairie Provinces are in revolt, with the Premiers of Alberta, Saskatchewan, and Manitoba unanimously rejecting Trudeau’s proposed fertilizer reduction policy.

As previously reported by The Counter Signal, in December 2020, the Trudeau government unveiled their new climate plan, with a focus on reducing nitrous oxide emissions from fertilizer by 30% below 2020 levels by 2030. He is now moving forward with the plan — though the government refuses to acknowledge that nitrous oxide emissions can be reduced without drastically reducing fertilizer use and thus crop production.

Continue reading “”

If he actually is mentally capable of understanding that he’s been humiliated,  that is.

Saudi Arabia Humiliates Joe Biden With Major Oil Announcement

Joe Biden’s recent trip to the Middle East made many headlines, and none of them were particularly good. The president first landed in Israel where he promptly insulted Holocaust victims. At several other points during the week, he looked physically and mentally frail, appearing aloof and out of it. Then there was Biden’s stopover in Saudi Arabia, which led to a now-infamous fist bump that set teeth gnashing because the left hate the Saudis.

But the topline from the president’s tour was simple: It accomplished nothing. While the White House tried to hint that a deal for increased production had been reached, there was never any evidence offered. The reason why became clear on Wednesday after the Saudis stabbed Biden directly in the front as part of a big announcement from OPEC Plus.

 

Saudi Arabia is one of the original founders of OPEC, and they wield heavy influence over the OPEC and OPEC Plus nations. The entire point of Biden’s trip to the kingdom was to secure Saudi support for a large increase in production to help offset the global oil supply crunch that has driven up prices. Instead of getting a production boost of around half a million barrels a day, the president ended up with just 100,000, a massive reduction compared to the expectation. For context, the United States uses about 21 million barrels of oil a day, making a global increase of 100,000 a day nothing but a rounding error.

The situation gets dimmer, though. Apparently, that “increase” doesn’t even amount to any real increase.

 

That is what total failure looks like. The President of the United States went to the Middle East to beg a country he had previously tried to make a “pariah” for oil. Why? Because Biden’s own domestic energy policies have been so disastrous. The president then returned with no actual agreement, choosing bluster over substance. Now, the results of that are in, and the Saudis aren’t even pretending to have played along. It’s yet another embarrassment for Biden and the nation.

This is the danger of having the world’s worst foreign policy “expert” in the White House. Biden has famously been wrong on every major geopolitical issue for the last half-century, and you can add his plan to punish the Saudis while elevating Iran to the list. It didn’t have to be this way. Trump left an improving Middle East on the table, with the Arab nations and Israel moving toward a historic peace. All Biden had to do was eat his ice cream, keep the status quo rolling, and reap the benefits for everyone.

He just couldn’t do it, though. Instead, the president stuck his finger in the eye of the Saudis, causing them to cease their long-standing cooperation, harming American consumers along the way. And for what? To pursue some pointless nuclear deal with Iran? This is who Biden is. He’s a man always in search of failure, and he can turn any good into bad.

Former Assistant U.S. Secretary and Investment Banker: The Truth About Digital Currencies

All Taxation With Zero Representation: ‘Absolute Control’ Through Central Bank Digital Currency

“If they don’t want you to be able to use your money more than five miles from your home, that’s it! Your money will turn off five miles from your home.”
Over the past two and a half years, we’ve been fast-tracked towards an authoritarian regime. The state has perpetually puts us in a ‘state of emergency,’ giving them the power to bypass legislation and govern by decree.

The end goal, it seems, through all of this is to set up a control system akin to China’s here in the West, and one of the key measures to reach this objective is the implementation of Central Bank Digital Currency (CBDC).

You don’t often see central bankers speak honestly, but BIS General Manager Augustin Carsten, in October of 2020, explained the “huge difference” between cash and CBDC.

“In cash, we don’t know who’s using a $100 bill today; we don’t know who is using a 1000 peso bill today. A key difference with the CBDC is that central bank will have absolute control on the rules and regulations that will determine the use of that expression of central bank liability. And also we will have the technology to enforce that. Those two issues are extremely important, and that makes a huge difference with respect to what cash is.”

This clip, Catherine Austin Fitts says is “The only time in my life I’ve ever seen a central banker be 100% honest. It’s quite remarkable.”

CBDC is a critical part of the ‘Digital Transaction Control Grid’ they’re trying to put into place, and Catherine describes what it would look like, if established, for everyday citizens.

“They’re trying to put into place a digital transaction control grid, which will tell you what you can do with your money — when you can do it — where you can go. If they don’t want you to be able to use your money more than five miles from your home, that’s it! Your money will turn off five miles from your home. If they decide they want to double taxes, they just take it out of your account.

It’s all taxation with absolutely zero representation. The interesting thing about it is once they get this system into place, I believe it won’t even be your national central bank that will control; it will be the Bank of International Settlements and the global systems that will control.”

Truly dystopian. If there’s anything we’ve learned from this COVID situation is that we cannot comply, not even for a second. So the moment they try to push this CBDC, we have to push back as hard as we can, much like we did with the WHO amendments, and put an end to its adoption before it begins.

 Biden Pushes Massive Tax Hike on Workers as Recession Begins.

The best way to revive an economy as you head into a recession is to slap businesses and workers with a massive tax hike. Said no legitimate economist ever.

Yet that’s apparently the best plan President Joe Biden and Democrats in Congress can come up with. Their new so-called “Inflation Reduction Act,” which would do almost nothing to reduce inflation , also includes a $315 billion tax on businesses. This comes in the form of a 15% “minimum corporate tax” applied to major U.S. corporations.

Biden says that this tax will allow him to spend huge sums on green energy subsidies and tax credits and “pay for all of this by requiring big corporations to pay their fair share of taxes, with no tax increases at all for families making under $400,000 a year.”

Yeah, right.

While this may be literally true in the sense that Biden will levy the tax on corporations, in reality, it will burden everyday people the most. Most economists agree that much of the true burden of corporate taxes is borne by workers through lower wages. There’s some dispute about exactly what percentage is ultimately absorbed by workers, but even the most favorable, left-leaning analyses acknowledge that it’s a significant chunk. Meanwhile, most research says it’s the majority!

As I previously summarized :

“William C. Randolph of the Congressional Budget Office found that for every dollar raised by the corporate tax, approximately 70 cents comes out of workers’ wages. Further confirming this finding, research from the Kansas City Federal Reserve concluded that a 10% increase in corporate taxes reduces wages by 7%.”

So, Biden’s plan to squeeze $315 billion more out of corporations actually means squeezing hundreds of billions out of workers — at the exact time we can least afford it.

Not only are families suffering under the crushing weight of inflation, but we also just crossed into a second consecutive quarter of a shrinking economy, which despite the White House’s attempted gaslighting, remains the conventional definition of a recession. (It is even used as the definition in several federal laws .) Raising taxes on businesses and workers is hardly ever a good idea, but in our current situation, it would be a gut punch to the productive sector at the worst possible time.

Tax Foundation Vice President of Federal Tax & Economic Policy William McBride warns that this tax increase would “reduce incentives for … companies to invest, grow, hire, and raise wages.”

He adds that in our current economic situation, “it would be extremely unwise to raise taxes, especially the type of taxes advocated by this administration, which would do excessive harm to the economy.”

Indeed, it would. If Biden has any sense left in him, he’ll heed this warning. But more realistically, swing-vote Sen. Kyrsten Sinema may now be our only hope of killing this terrible bill and sparing the public more economic suffering.

US GDP shrank 0.9% in second quarter, signaling a recession

The US gross domestic product posted its second straight quarterly decline in an alarming development that economists widely view as the definition of an economic recession.

The economy shrank by 0.9% in the second quarter, contracting despite economists’ expectations of muted 0.3% growth, according to Commerce Department data. The GDP report is the broadest indication of the US economy’s performance.

The downtick followed a first-quarter report in which the US economy posted a surprise decline of 1.6%.

The GDP report was released one day after the Federal Reserve hiked its benchmark interest rate by three-quarters of a percentage point for the second straight month to cool inflation, which hit 9.1% in June.

The Fed’s sharp rate hikes have exacerbated investor concerns about its ability to engineer a “soft landing” by taming inflation without causing an economic downturn. Meanwhile, businesses and consumers alike are facing the dual impact of inflation that has sapped their buying power and higher interest rates that have made borrowing money more expensive.

The GDP downturn followed assurances by top economic policymakers that the underlying economy is strong. Fed Chair Jerome Powell indicated on Wednesday that he does not see the US economy in a recession at present.

The real gross domestic product (GDP) decreased at an annual rate of 0.9 percent in the second quarter of 2022.
The real gross domestic product (GDP) decreased at an annual rate of 0.9 percent in the second quarter of 2022.
Bureau of Economic Analysis

Continue reading “”

Joe Manchin Agrees to Tax Hikes, Spending Increases, Green New Deal Agenda Items

Joe Manchin announced he reached an “expansive” deal with Chuck Schumer on Build Back Brandon.

This is now Manchin stating this, so this seems unfortunately real.

We don’t know the details, though.

In an unexpected turnabout, Sen. Joe Manchin announced Wednesday that he had reached an expansive agreement with Senate Majority Leader Chuck Schumer which had eluded them for months on health care costs, energy and climate issues, taxing higher earners and large corporations and reducing federal debt.

That last one is smoke-and-mirrors– he wants to jack up taxes and spend lots more federal dollars, but take some of the new tax revenue and supposedly use it to retire a small amount of federal debt so he can claim he’s not blowing up the deficit.

Manchin, D-W.Va., whose resistance had long derailed sweeping legislation on those issues, abruptly revealed the agreement in a press release. It provided virtually no details on the accord.Manchin, one of the most conservative Democrats in Congress, just last week said he would only agree this month to far more limited legislation curbing prescription drug costs and extending federal subsidies for health care costs.

He said he was open to considering a broader compromise on environment and tax issues after Congress returns from a summer recess in September, an offer that many Democrats thought dubious.

There was no immediate explanation why Manchin had suddenly agreed to the far broader package.

Meanwhile, while Manchin is raising taxes, the Fed is raising interest rates to combat inflation.

The Federal Reserve raised its benchmark overnight interest rate by three-quarters of a percentage point on Wednesday in an effort to cool the most intense breakout of inflation since the 1980s, and U.S. central bank chief Jerome Powell said another “unusually large” hike may be appropriate in September if price pressures have not sufficiently abated.

Manchin’s agreeing to raise taxes, which might reduce economic activity, while also increasing spending, which is inflationary, and therefore fights against what the Fed is trying to do, and may require the Fed to raise interest rates more.

What a guy. Glad West Virginia keeps reelecting him because he “seems like one of them” and once shot a rifle through the Cap and Trade bill.

Meanwhile, Biden’s got his best propagandists out there explaining to the media how they are ordered to report the Official Non-Recession Event.

RECESSIONAL

The Biden administration continues to prepare the battlefield for the Commerce Department’s second-quarter 2022 GDP estimate on Thursday. Administration officials must anticipate an estimate reflecting that we are in a recession, because they are making fools of themselves to deflect it in the meantime. What they really need to do is bring back the late Carter administration economic official Alfred Kahn and dub it the banana. “Between 1973 and 1975 we had the deepest banana that we had in 35 years,” Kahn famously explained, “and yet inflation dipped only very briefly.”

What we have is Joe Biden and his clown-car administration. It lacks a single official or spokesman with Kahn’s wit or wisdom. Not even close.

As for the Biden administration, that was then.

This is now

Continue reading “”