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The War on Gasoline a Gift to Trump

The Wall Street Journal says Gavin Newsom’s War on Gasoline Is a Gift to Donald Trump.

California’s prices are the highest in the country—$5.21 a gallon on average vs. $3.59 nationwide—owing to hefty taxes and burdensome regulations, such as its cap-and-trade program and low-carbon fuel standard. Here’s the rub: California refineries supply nearly 90% of Nevada’s gasoline and half of Arizona’s.

Mr. Newsom is escalating his war on the industry. The California Energy Commission is planning to impose a tax on refineries’ “gross margins”—i.e., the difference between wholesale gasoline and crude prices plus certain regulatory costs. The gross margin notably doesn’t include refiners’ operating costs, which include employee pay.

Mr. Newsom conflates profits and gross margins. According to the commission’s data, refiners lost between 10 and 38 cents on each gallon they produced from October 2023 through February 2024, while their gross margins ranged from 56 to 79 cents a gallon. In December, California refineries lost 31 cents a gallon while the state imposed $1.15 a gallon in taxes and regulatory fees.

The price gougers in Sacramento now want to penalize drivers even more. Mr. Newsom is pushing the commission to finalize the refinery tax at the same time as the California Air Resources Board, or CARB, prepares to tighten its low-carbon fuel standard and greenhouse-gas emissions cap. These regulations add about 54 cents to the price of each gallon of gasoline. CARB’s rules will increase the cost by an estimated 88 cents a gallon in 2026 and $1.01 by 2031.

…click on the above link to read the rest of the article…

Empires are built through the creation or acquisition of wealth. The Roman Empire came about through the productivity of its people and its subsequent acquisition of wealth from those that it invaded. The Spanish Empire began with productivity and expanded through the use of its large armada of ships, looting the New World of its gold. The British Empire began through localized productivity and grew through its creation of colonies worldwide—colonies that it exploited, bringing the wealth back to England to make it the wealthiest country in the world.

In the Victorian Age, we Brits were proud to say, “There will always be an England,” and “The sun never sets on the British Empire.” So, where did we go wrong? Why are we no longer the world’s foremost empire? Why have we lost not only the majority of our colonies, but also the majority of our wealth?

Well, first, let’s take a peek back at the other aforementioned empires and see how they fared. Rome was arguably the greatest empire the world has ever seen. Industrious Romans organized large armies that went to other parts of the world, subjugating them and seizing the wealth that they had built up over generations. And as long as there were further conquerable lands just over the next hill, this approach was very effective. However, once Rome faced diminishing returns on new lands to conquer, it became evident that those lands it had conquered had to be maintained and defended, even though there was little further wealth that could be confiscated.

The conquered lands needed costly militaries and bureaucracies in place to keep them subjugated but were no longer paying for themselves…

…click on the above link to read the rest of the article…

JPM Predicts Global AI Data Centers Will Consume 681 Olympic-Sized Pools Of Fresh Water Daily

May 23, 2024

JPM Predicts Global AI Data Centers Will Consume 681 Olympic-Sized Pools Of Fresh Water Daily

Wall Street banks are in a frenzy over “The Next AI Trade,” piling into the ‘Powering up America’ investment themes, whether that’s power grid companies, commodities, such as copper, gold, silver, and uranium, and artificial intelligence chipmakers, to accommodate the explosion of generative artificial intelligence data centers anticipated nationwide through the end of the decade and beyond.

JPMorgan’s Asia Pacific Equity Research desk is the latest bank to jump on AI trade in a note titled “Deep Dive into Power, Cooling, Electric Grid and ESG implications.”

Focusing on AI data center power consumption is too repetitive at this point, considering we’ve laid it all out on a silver platter for premium ZH subs in the “The Next AI Trade” and “The Next AI Trade Just Hit An All-Time High.”

As well as this real-world example…

Goldman Finds Commercial Power Demand In Virginia Explodes Higher As ‘Next AI Trade’ Soars

Even Blackstone Chief Executive Officer Steve Schwarzman and BlackRock Chairman and Chief Executive Larry Fink have jumped onto the power grid and AI investment theme as there is plenty of upside in the years ahead – unless AI demand doesn’t shit the bed.

Back to JPM’s note, authored by analyst William Yang and his team, which near the end explained, “While data centers have been scrutinized for heavy electricity use, the water intensive nature of their operations has been comparatively overlooked.”

Citing data from Bluefield Research, Yang said total water consumption by global data centers (including on-site cooling and off-site power generation) has grown 6% annually from 2017 to 2022. He said by 2030, water consumption could jump to 450 million gallons per day. To put this in perspective, that’s 681 Olympic-sized pools of fresh water that will be needed each day to cool global data centers in about 4.5 years.

…click on the above link to read the rest of the article…

Truth or CONsequences?

May 21, 2024

Truth or CONsequences?

When your government cons you daily with its statistical “facts,” it’s hard to keep your balance. Conned-sumers are feeling the cognitive disconnect from reality.

For years, I’ve been saying it appears the BLS (Bureau of Lying Statistics) publishes fake labor statistics. The numbers always look like the seasonal adjustments are used by each administration to try to make the numbers look better, which means we are operating our country on delusions, not on facts. Ultimately that cannot possibly be as good for the nation as seeing reality as it is and dealing with it together.

Never, however, have the numbers looked so blatantly fake as they have under the Biden administration, and I’ve been pushing that point for months now. Then along came a major mainstream publisher (CNBC) who finally said (first I’d ever heard from the mainstream financial press), “These numbers look rigged.” And now, at last, comes a US congresswoman who tells the head of the BLS she should lose her job if she cannot come up with real numbers, pointing out, as I have for some time now, that it seems a bit too convenient that the numbers always come out initially looking great for her Boss, #NoMoJo Biden, and then get revised down to a more dismal reality later in the year when practically no one is looking … and that this happens EVERY SINGLE MONTH and ALWAYS IN THE SAME DIRECTION!

The fluctuating statistics have finally caught the attention of lawmakers in Congress. Last week, Rep. Mary Miller, R-Ill., grilled Acting Labor Secretary Julie Su about her Biden-friendly reports.

“I pressed the Biden Administration on why their jobs numbers are consistently wrong and quietly revised downward after they are announced. What is going on at BLS?…”

— Rep. Mary Miller (@RepMaryMiller) May 3, 2024

…click on the above link to read the rest of the article…

US Power Grid May Become Unreliable This Summer, Watchdog Warns

May 18, 2024

US Power Grid May Become Unreliable This Summer, Watchdog Warns

A third of the country is facing an ‘elevated risk of blackouts’ soon, an industry expert said.

Parts of America could face difficulties in meeting electricity demand during the summer season, with renewable energy sources like wind and solar power posing a potential risk to reliable power supply, according to a report by the North American Electric Reliability Corporation (NERC).

The NERC report classifies several parts of the country as facing an “elevated” risk of summer electricity reliability for the upcoming June-September period.

Elevated risk means there is “potential for insufficient operating reserves” when the region faces above-normal demand conditions. Such regions include parts of Louisiana, Texas, New Mexico, Arizona, California, Illinois, and Iowa. The determination of elevated risk is based on various factors, including potential low wind or solar energy conditions that could lead to a lower electricity supply.

The North American power bulk power system (BPS) is made up of six regional entities—Midwest Reliability Organization (MRO), Northeast Power Coordinating Council (NPCC), ReliabilityFirst (RF), SERC Reliability Corporation (SERC), Texas Reliability Entity (Texas RE), Western Electricity Coordinating Council (WECC)—with elevated risk upcoming in certain regions.

Midcontinent Independent System Operator (MISO), which manages the electricity capacity market, operates in 15 U.S. states, including Texas, Illinois, Montana, Arkansas, and Kentucky. MISO is expected to have “sufficient resources” to meet normal summer peak demand, the NERC report said.

However, if MISO were to face above-normal peak demand conditions at a time when wind and solar output is lower than expected, it could be “challenging” for the transmission organization to meet demand.

…click on the above link to read the rest of the article…

Small-scale farmers in Ethiopia: First came conflict, then devastating drought

May 17, 2024

Small-scale farmers in Ethiopia: First came conflict, then devastating drought

An Ethiopian farmer with turban working in his field with a spade.

Kalayu and other farmers can now harvest up to four times a year, instead of relying only on rain and harvesting only once a year. All photos: Sarah Easter/CARE

Kalayu, 70, was once a self-sufficient farmer, but “last season,” he says, “there was no harvest at all. We did not have any rain.”

Kalayu is from Tigray, Ethiopia, where 95 percent of potentially irrigable land in Ethiopia depends on rainfall. It is also where a two-year-long conflict ended only in November 2022, affecting an estimated seven million people. The conflict led to numerous casualties, mass displacements, food insecurity, and damage to infrastructure.

“First came the conflict, then the drought,” he says. “The conflict took all my resources. All my goats and sheep were lost. They were the source of our happiness and immediate income. We relied on their milk for nutrition.”

The shortage of rainfall has severely affected overall agricultural production, and surface and groundwater resources across the country. In Tigray, out of 1.3 million hectares of cultivable land, only half was planted due to drought where only 37 percent was harvested during the main season.

Nearly 1.4 million people in Tigray need immediate emergency food because of the drought.

“We usually sow between May and June, then the rain starts in June and stays until September. We harvest in October and November. But not last year,” Kalayu says.

June to September is the primary rainy season which accounts for 50 to 80 percent of the annual rainfall. The severe rainfall shortage in Tigray has put the region’s predominantly agricultural population in a precarious situation. Approximately 80 percent of Tigray’s residents are farmers who rely on consistent rainfall and favorable growing conditions to produce the food they need to sustain themselves and their communities.

Water is a major crisis across Tigray, a predominantly arid region.

…click on the above link to read the rest of the article…

Mike Walden: Is it ‘greedflation’ or something more keeping prices high?

May 17, 2024

Mike Walden: Is it ‘greedflation’ or something more keeping prices high?

Photo by Adam Nir on Unsplash

Although the pace at which prices are rising has moderated, prices are still going up. In 2021, average consumer prices surged 7%; in 2022 they jumped 6.5%; in 2023 prices went up a more tolerable 3.4%, and the latest reading for 2024 shows consumer prices are up 3.5% from the same period in 2023. Cumulatively this puts prices up over 20% since 2021.

As long as consumers’ financial resources increase at the same or a higher rate than price inflation, then there’s no loss of purchasing power. But most people know this hasn’t happened. Indeed, from 2021 to now, the average consumer’s purchasing power is off by 5%.

I mention these statistics to show that inflation is still a problem, which is something most people know. The next question is, why is inflation still a continuing issue?

When inflation began its spurt in 2021 there was an easy-to-understand reason – consumers were trying to buy more than sellers had to offer. Consumers were flush with cash as a result of the COIVD-19 relief programs enacted in both 2020 and 2021. These programs culminated in $6.5 trillion being rapidly pushed into the economy. Initially there were few buying opportunities as large parts of the economy had not yet reopened.

When consumers were able to buy, they had what economists call “pent-up demand,” meaning they wanted to buy a lot! Typically this wouldn’t have been a problem, but there was another issue that had emerged – supply-chain problems. So, in short, consumers wanted to really buy, but many of the shelves were bare. In this situation, it was inevitable prices would rise substantially, which they did.

But today, consumers have spent most of the COVID money, and the supply-chain has mostly been fixed. Yet inflation is running hotter than the 1.8% in 2019, before the pandemic….

…click on the above link to read the rest of the article…

This Is the Proverbial Ball You Should Be Keeping Your Eye On…

May 17, 2024

This Is the Proverbial Ball You Should Be Keeping Your Eye On…

Gold, the Brief History of U.S. Debt, Not a Great Club, and the U.S.’ Debt-to-GDP Surpassing Venezuela’s

“Blessed are the young, for they shall inherit the national debt.”
~ Herbert Hoover

If you’re like me, you probably sometimes come across an important economic or geopolitical event in screaming headlines and think, “That’s bullish for gold.” But then the metal moves in the opposite direction from what you were expecting. Doug Casey always tells us not to worry about short-term fluctuations — and he’s absolutely right — but it’s still frustrating at times.

Now, it’s easy to dismiss these thoughts because gold has recently hit new all-time highs, topping $2,400 per ounce.

But remember, there’ve been plenty of corrections during this gold bull run. And trust me, there’ll be many more.

When they happen, it’s easy to get distracted, lose patience, even sleep, and get shaken out of an otherwise winning investment.

That’s why it’s crucial that you always keep your eye on the ball. Which, I should say, is more like a snowball in this case.

Snowball's Gonna Snowball

Major financial, economic, or political shifts don’t just happen overnight. They’re more like a snowball rolling downhill, picking up speed and size along the way. Eventually, they reach a tipping point, transforming into full-blown crises, catching the unprepared off guard.

And, of course, there’s no better example of this today than the the ever-growing snowball of the U.S. debt that has become so big it’s already engulfing our whole economy. Consider this chart.

Notice that government debt was practically nonexistent halfway through the 20^th century, but has seen a dramatic increase in the following decades. This happened with the expansion of federal government spending under Presidents Franklin D. Roosevelt, Lyndon B. Johnson’s, Richard Nixon. And debt just kept snowballing since.

…click on the above link to read the rest of the article…

Why Gold Is Flowing From West To East

May 17, 2024

Why Gold Is Flowing From West To East

Yesterday silver hit a four-week high and gold continues to hold onto recent gains. Today’s labour market data isn’t sparking significant movement in the gold market. However, it is facing some technical selling pressure as it tests resistance levels slightly below $2,400 per ounce. Yesterday’s US CPI report presented a scenario that is bullish for precious metals investors. With CPI data coming in lower than expected policy doves will now be pushing for the FOMC to cut rates sooner, rather than later.

For gold and silver investors in the West, the uncertainty regarding the FOMC’s next moves is dampening prices somewhat, but they do remain in a solid uptrend. We continue to see a divergence between gold demand drivers between the East and West. In the West central bank decisions and economic data remain at the forefront of buyers’ minds, but in the East this is now a secondary factor. Instead central banks, institutions and consumer East of Germany are focused on gold accumulation, even buying into the price surge last month.

The release of the World Gold Council’s Q1 demand trends report has confirmed this. Data for the first quarter of this year showed the PBoC’s gold purchases continued for a 17th month in a row, whilst gold bar and coin demand was also driven by China.

So where does this leave the West? In today’s video Jan Skoyles wonders if it leaves them with ‘no plan B’. Do you agree? We’ve been chatting to a few clients recently and it has been interesting to hear thoughts on future gold market trends and what is driving people to increase their gold allocation. Let us know yours, either by replying to this email or in the comments below the video.

Why is China buying up so much gold and what does it mean for the gold price? We take a look in this week’s latest video.

Climate models can’t explain 2023’s huge heat anomaly — we could be in uncharted territory

May 14, 2024

Climate models can’t explain 2023’s huge heat anomaly — we could be in uncharted territory

Taking into account all known factors, the planet warmed 0.2 °C more last year than climate scientists expected. More and better data are urgently needed.

When I took over as the director of NASA’s Goddard Institute for Space Studies, I inherited a project that tracks temperature changes since 1880. Using this trove of data, I’ve made climate predictions at the start of every year since 2016. It’s humbling, and a bit worrying, to admit that no year has confounded climate scientists’ predictive capabilities more than 2023 has.

For the past nine months, mean land and sea surface temperatures have overshot previous records each month by up to 0.2 °C — a huge margin at the planetary scale. A general warming trend is expected because of rising greenhouse-gas emissions, but this sudden heat spike greatly exceeds predictions made by statistical climate models that rely on past observations. Many reasons for this discrepancy have been proposed but, as yet, no combination of them has been able to reconcile our theories with what has happened.

Earth just had its hottest year on record — climate change is to blame

For a start, prevalent global climate conditions one year ago would have suggested that a spell of record-setting warmth was unlikely. Early last year, the tropical Pacific Ocean was coming out of a three-year period of La Niña, a climate phenomenon associated with the relative cooling of the central and eastern Pacific Ocean. Drawing on precedents when similar conditions prevailed at the beginning of a year, several climate scientists, including me, put the odds of 2023 turning out to be a record warm year at just one in five.

…click on the above link to read the rest of the article…

Tracking toward mass extinction

May 14, 2024

Tracking toward mass extinction

Where “Two plus two equals five if the party says so” (George Orwell)
and when drilling methane wells reduces global warming

Having turned a blind eye to climate science, ignoring the evidence that extreme atmospheric carbon dioxide (CO₂), methane (CH₄) rise and ocean acidification have led to mass extinctions of species through time, humanity allows an exponential growth of carbon emissions to track toward a global suicide marked by false pretexts and betrayal by the powers that be. The evidence suggests unabated global warming will lead to 3.4 million Deaths Per Year by Century End, fatal consequences calling for a preemptive Nuremberg-like trial exposing the crimes leading to the looming climate suicide.

Note the future estimates of CO₂ levels.

[ Figure 1. Historic CO₂, by Owen Mulhern, image from Forster et al. (2017) ]

Note the sharp current and near-future temperature rise.

[ Figure 2. by Glen Fergus, from: Wikipedia – Temperature of Planet Earth ]

The rise in CO₂ in the atmosphere and oceans and the rise in ocean acidity (decline in pH).

[ Figure 3. As human activities have increased CO2 levels in our atmosphere (red line),
about a third of that CO2 has been absorbed by the ocean (green line), and
ocean pH has decreased (blue line). Adapted from NOAA by UC Museum of Paleontology. ]

According to the IPCC, as stated by the late Prof Will Steffen, Australia’s foremost climate scientist, if the exponential rise in greenhouse gas emissions continues we will already have crossed the upper limit that gives us a two-thirds chance of limiting warming to <2.0°C. Other scientists estimate that we have already missed the boat.

…click on the above link to read the rest of the article…

The All-Important Doorman

May 14, 2024

The All-Important Doorman

Picture this: A tribal leader from a distant country visits the US. He’s brought to a large apartment building in New York City. When he gets out of the car, he looks up at the great building and is quite impressed. A uniformed doorman exits the foyer and comes out on the sidewalk. The tribesman sees the gold braiding and brass buttons of his coat and immediately decides that this is a very important person. Again he looks up at the building and says to the doorman, “This is a very great home you have. You must be very important indeed.”

Of course, if we were present, we might chuckle at the tribesman’s naiveté. The owners of such a great building would never greet people at the entrance. They leave such trivial tasks to hired servants, whilst they run the real business without ever needing any direct contact with visitors as they enter the building. And, in addition, doormen come and go – they are, after all, disposable. The owners – those who control what happens in the building – retain their positions over the long term… and may remain anonymous, if they so choose.

We find this simple concept easy enough to understand, and yet we chronically have difficulty in understanding that, in most countries, the president, or prime minister, is not by any means the man who makes the big decisions in the running of the country.

We assume that, because we were allowed to vote for our leader, he must actually be our leader. But, as Mark Twain has at times been credited as saying, “If voting made any difference, they wouldn’t let us do it.”

…click on the above link to read the rest of the article…

Peter Schiff: Rate Hikes on the Horizon?

May 9, 2024

Peter Schiff: Rate Hikes on the Horizon?

Peter’s back to recap the last week in markets and economic news. This episode starts with April’s dismal stock performance and also discusses Jerome Powell’s most recent appearance. Peter wraps up the episode by recounting the Bitcoin debate he participated in on Friday.

Peter notes that April’s losses in the stock market were in part created by doubt about the Fed’s future rate cuts:

“The reason for that was heightened talk not just about the Fed not cutting rates, but for the first time, I heard people discussing the possibility that the Fed might have to raise rates, that the next move may in fact be a hike and not a cut. Now that‘s the first time that I’ve heard any mainstream discussion of that possibility. … I’ve been saying that that is the correct policy. If the Fed really is data-dependent, and if the Fed really wants to fight inflation, based on the data, they should resume their hikes.”

Despite this possibility, markets are unduly optimistic. The Fed’s historical record is not very successful, even decades ago when America’s fiscal health was much better:

“The markets believe that the Fed is going to succeed. This is pure nonsense! I look back at the inflation statistics for the 40 years before the 2008 financial crisis— so 2008, 2007, going back to 1968, those 40 years— there were only 3 years where inflation was 2% or lower. The average inflation rate over those 40 years was 4.8%. … If the Fed wasn’t able to come close to 2% during those 40 years, why does anybody think it’s going to come anywhere near it over the next 30 years?”

Fed Chair Jerome Powell still refuses to criticize federal fiscal policy, despite the apparent need for rate hikes:

…click on the above link to read the rest of the article…

Discovering Power’s Traps: a primer for electricity users

May 3, 2024

Discovering Power’s Traps: a primer for electricity users

In magazines like Mother Jones and Sierra Club, environmentalists who aim to reduce harmful impacts to public health, wildlife habitats and climate systems propose “electrifying everything.”

I don’t get it.

Already, most of our food, shelter, communications and transportation systems depend on electricity. Replacing vehicles, stoves, heaters, water heaters and money (mining bitcoin) with electric ones would require massive expansion of the power grid. We’d have to manufacture lots of new appliances and vehicles (and discard old ones). We’d have to manufacture and operate more substations, generators, transformers, power lines, appliances, circuit boards and batteries. Their manufacturing would require more fossil fuels, more rare earth elements, more water, more smelting and refining, more hazardous chemicals and more international shipping. It would generate more toxic waste and more electromagnetic radiation.

So would adding artificial intelligence (AI), solar PV, wind and battery systems to our technosphere. Electrifying everything would also require expanding telecommunications: more satellites, cell sites, data storage centers and computers.

Given power outages’ increasing frequency, increasing our dependence on electricity now…makes no sense.

What are our goals again?

To reduce harms to nature: to reduce harms to public health, wildlife habitats and climate systems. To keep power reliable and safe.

Electrifying everything cannot accomplish these goals.

To reduce harms to nature, we need to manufacture less, consume less and significantly limit new infrastructure. We need liability-carrying subject-matter experts to evaluate every product’s ecological impacts from cradle-to-grave.

To keep power reliable and safe, we need engineers in charge of the grid.

To reduce demands

I understand that using fossil fuels increases global temperatures and severe weather conditions. Electricity, usually powered by natural gas or coal, accounts for roughly 20% of global energy consumption. Transportation (of people and goods), run largely on petroleum, accounts roughly for 25%.

…click on the above link to read the rest of the article…

Falling From Grace

April 30, 2024

Falling From Grace

Years ago, Doug Casey mentioned in a correspondence to me, “Empires fall from grace with alarming speed.”

Every now and then, you receive a comment that, although it may have been stated casually, has a lasting effect, as it offers uncommon insight. For me, this was one of those and it’s one that I’ve kept handy at my desk since that time, as a reminder.

I’m from a British family, one that left the UK just as the British Empire was about to begin its decline. They expatriated to the “New World” to seek promise for the future.

As I’ve spent most of my life centred in a British colony – the Cayman Islands – I’ve had the opportunity to observe many British contract professionals who left the UK seeking advancement, which they almost invariably find in Cayman. Curiously, though, most returned to the UK after a contract or two, in the belief that the UK would bounce back from its decline, and they wanted to be on board when Britain “came back.”

This, of course, never happened. The US replaced the UK as the world’s foremost empire, and although the UK has had its ups and downs over the ensuing decades, it hasn’t returned to its former glory.

And it never will.

If we observe the empires of the world that have existed over the millennia, we see a consistent history of collapse without renewal. Whether we’re looking at the Roman Empire, the Ottoman Empire, the Spanish Empire, or any other that’s existed at one time, history is remarkably consistent: The decline and fall of any empire never reverses itself; nor does the empire return, once it’s fallen.

But of what importance is this to us today?

…click on the above link to read the rest of the article…

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