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An Oil Supply Shock May Be Imminent

An Oil Supply Shock May Be Imminent

  • Oil demand has remained resilient in the face of a multitude of challenges.
  • OPEC+ has fallen behind more than 3.5 million bpd on its output goals.
  • The DoE has no immediate plans to start refilling the SPR.
  • The risk of a supply shock grows as China’s economy re-opens while Russian oil is being forced off the market.

When the chief executive of Aramco said earlier this week that years of underinvestment had damaged the balance between supply and demand in the oil market, it should have been a wake-up call to those in decision-making positions. Instead, the secretary-general of the UN bashed the oil industry once again for “feasting” on record-high profits and urged governments to make them pay for this.

Meanwhile, OPEC’s production shortfall last month reached 3.58 million bpd—a figure equal to some 3.5 percent of global demand—and the United States continued to sell oil from its strategic petroleum reserve.

These seemingly unrelated news reports do have something very important in common. Both clearly suggest a supply shortfall on a global level is imminent. Throw in the news that Russia’s oil exports could fall by some 2.4 million bpd after the EU embargo enters into effect in December, and an oil shortage becomes more or less unavoidable.

Oil demand has remained resilient in the face of a multitude of challenges, and even prices of over $100 per barrel failed to curb it in any significant way earlier this year. Now, prices are somewhat tempered, but the embargo is still about two months away. Once this kicks in, prices are bound to jump because alternative supply is limited. And the U.S. will need to start refilling its SPR at some point because it is getting depleted.

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The US Empire Is Accelerating Toward Global Conflict On Two Fronts

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‘Samarkand Spirit’ to be driven by ‘responsible powers’ Russia and China

‘Samarkand Spirit’ to be driven by ‘responsible powers’ Russia and China

The SCO summit of Asian power players delineated a road map for strengthening the multipolar world

Amidst serious tremors in the world of geopolitics, it is so fitting that this year’s Shanghai Cooperation Organization (SCO) heads of state summit should have taken place in Samarkand – the ultimate Silk Road crossroads for 2,500 years.

When in 329 BC Alexander the Great reached the then Sogdian city of Marakanda, part of the Achaemenid empire, he was stunned: “Everything I have heard about Samarkand it’s true, except it is even more beautiful than I had imagined.”

Fast forward to an Op-Ed by Uzbekistan’s President Shavkat Mirziyoyev published ahead of the SCO summit, where he stresses how Samarkand now “can become a platform that is able to unite and reconcile states with various foreign policy priorities.”

After all, historically, the world from the point of view of the Silk Road landmark has always been “perceived as one and indivisible, not divided. This is the essence of a unique phenomenon – the ‘Samarkand spirit’.”

And here Mirziyoyev ties the “Samarkand Spirit” to the original SCO “Shanghai Spirit” established in early 2001, a few months before the events of September 11, when the world was forced into strife and endless war, almost overnight.

All these years, the culture of the SCO has been evolving in a distinctive Chinese way. Initially, the Shanghai Five were focused on fighting terrorism – months before the US war of terror (italics mine) metastasized from Afghanistan to Iraq and beyond.

Over the years, the initial “three no’s” – no alliance, no confrontation, no targeting any third party – ended up equipping a fast, hybrid vehicle whose ‘four wheels’ are ‘politics, security, economy, and humanities,’ complete with a Global Development Initiative, all of which contrast sharply with the priorities of a hegemonic, confrontational west.

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The Hilarious Reason Europe Won’t Freeze This Winter

The Hilarious Reason Europe Won’t Freeze This Winter

China’s Water Crisis Could Trigger Global Catastrophe

China’s Water Crisis Could Trigger Global Catastrophe

China’s water crisis is nothing new, but it’s gotten worse – and is now on the ‘brink of catastrophe and could trigger a global catastrophe, according to Foreign Affairs.

Dried-up riverbed of Jialing river, a Yangtze tributary, China, August 2022
Thomas Peter / Reuters

Given the country’s overriding importance to the global economy, potential water-driven disruptions beginning in China would rapidly reverberate through food, energy, and materials markets around the world and create economic and political turbulence for years to come. -Foreign Affairs

For starters, there’s no substitute for water – which is essential for food production, electricity generation and sustaining all life on earth.

In China, which consumes ten billion barrels of water per day (approximately 700x its daily oil consumption), decades of economic and population growth have pushed northern China’s water system to unsustainable levels.

According to the report, the per-capita water supply around the North China Plain at the end of 2020 was nearly 50% below the UN’s definition of acute water scarcity at 253 cubic meters. Other major cities, including Beijing, Shanghai, Tianjin, are at similar (or lower) levels.

For comparison, Egypt had per-capita freshwater resources of 570 cubic meters, and has nowhere near as large of a manufacturing base as China.

Not fit for human consumption

Also worrisome, is that 19% of China’s surface water is not fit for human consumption according to China’s Ministry of Ecology and Environment. Roughly 7% was deemed unfit for any use at all.

Groundwater was worse – with around 30% considered unfit for consumption, and 16% unfit for any use.

In order to utilize this water, Beijing will need to make major investments in treatment infrastructure, which will require a significant increase in electricity usage in order to power the equipment.

Working against progress is China’s farming and industrial industries, which dump contaminants into the country’s groundwater – potentially setting the stage for decades of additional impairments.

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Russia And China Officially Announce A “New Global Reserve Currency”

Russia And China Officially Announce A “New Global Reserve Currency”

And once again, as happens often with consequential news in the United States and the West, no one has noticed and no one seems to care.

If you’ve blinked over the last month, you may have missed it…

China and Russia are taking their shot at the U.S. dollar. And as often happens with consequential news in the United States and the West, no one seems to notice or even care.

Since the beginning of the year, I have been writing about the possibility of Russia and China challenging the US dollar’s global reserve status. Now, it’s happening.

It shouldn’t be any surprise to those paying attention that Russia and China are strengthening their economic ties amidst continued Western sanctions on Russia as a result of the country’s war in Ukraine.

What may surprise some people, however, is that Russia and the BRICS countries, including Brazil, Russia, India, China, and South Africa, are officially working on their own “new global reserve currency,” RT reported in late June. Nobody even seemed to notice.


“The issue of creating an international reserve currency based on a basket of currencies of our countries is being worked out,” Vladimir Putin said at the BRICS business forum last month.

And of course, as Russia has been cut off from the SWIFT system, it is also pairing with China and the BRIC nations to develop “reliable alternative mechanisms for international payments” in order to “cut reliance on the Western financial system.”

In the meantime, Russia is also taking other steps to strengthen the alliance between BRIC nations, including re-routing trade to China and India, according to CNN:

President Vladimir Putin said Wednesday that Russia is rerouting trade to “reliable international partners” such as Brazil, India, China and South Africa as the West attempts to sever economic ties.

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Think Only Good Thoughts

Think Only Good Thoughts

Black and white creates a strange dreamscape that color never can.” – Jack Antonoff

The original iteration of Rod Serling’s The Twilight Zone is perhaps the most iconic television anthology in history. With 156 episodes aired over five seasons (1959-1964), the CBS show broke new ground with its unsettling mix of suspense, drama, horror, and moral provocations. At its core, the show was meant to make the viewer ponder deep philosophical questions by making them uncomfortable. After an unexpected reveal, the viewer was left with the confrontational rawness of each episode’s dilemma to work through – along with a powerful incentive to watch the next one. Contrary to the modern belief that weaponized clickbait is the key to durable engagement, people enjoy being made to think, and Serling tapped into this desire with brilliant flair.

In the 10th episode of the third season – The Midnight Sun – a prolific artist (Norma) and her elderly landlady (Mrs. Bronson) find themselves in an existential crisis: Earth has suddenly changed its orbit and is hurtling ever closer to the sun. The last residents in their New York apartment building, the pair are sweating out their final moments when confronted by a desperate looter looking to quench his ultimately unquenchable thirst. In a twist of perspective, the viewer learns that the entire episode has been a fever dream, and Norma wakes up to discover that Earth is moving away from the sun. Her imminent demise will be the result of global cooling, not warming. The episode was designed to demonstrate Earth’s fragility, couched in the context of a cold war threatening to turn hot and looming large in the collective attention of the day.

Norma and Mrs. Bronson | CBS

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Silicon Valley Corporations Are Taking Control Of History

Listen to a reading of this article:

Twitter has imposed a weeklong suspension on the account of writer and political activist Danny Haiphong for a thread he made on the platform disputing the mainstream Tiananmen Square massacre narrative.

The notification Haiphong received informed him that Twitter had locked his account for “Violating our rules against abuse and harassment,” presumably in reference to a rule the platform put in place a year ago which prohibits “content that denies that mass murder or other mass casualty events took place, where we can verify that the event occured, and when the content is shared with abusive intent.”

“This may include references to such an event as a ‘hoax’ or claims that victims or survivors are fake or ‘actors,’” Twitter said of the new rule. “It includes, but is not limited to, events like the Holocaust, school shootings, terrorist attacks, and natural disasters.”

That we are now seeing this rule applied to protect narratives which support the geostrategic interests of the US-centralized empire is not in the least bit surprising.

Haiphong is far from the first to dispute the mainstream western narrative about exactly what happened around Tiananmen Square in June of 1989 as the Soviet Union was crumbling and Washington’s temporary Cold War alignment with Beijing was losing its strategic usefulness. But we can expect more acts of online censorship like this as Silicon Valley continues to expand into its role as guardian of imperial historic records.

This idea that government-tied Silicon Valley institutions should act as arbiters of history on behalf of the public consumer is gaining steadily increasing acceptance in the artificially manufactured echo chamber of mainstream public opinion. We saw another example of this recently in Joe Lauria’s excellent refutation of accusations against Consortium News of historic inaccuracy by the imperial narrative management firm NewsGuard.

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Bankrupt Sri Lanka Takes Russian Crude As Fuel Crisis Depletes Stocks, Mulls Loan From China

Bankrupt Sri Lanka Takes Russian Crude As Fuel Crisis Depletes Stocks, Mulls Loan From China

A foreign exchange shortage has resulted in the worst financial crisis Sri Lanka has ever endured, with shortages of everything from food to crude. Fuel supplies are down to just days, food has run out at supermarkets, and social-economic chaos has unfolded across the island country in South Asia.

However, there’s short-term hope, and somehow the bankrupt country found enough money to pay for a shipment of Russian crude.

Bloomberg said Ceylon Petroleum Corp., the country’s only refinery, is set to take shipment of Russian grade Siberian Light on May 28. It will be the first time the refinery has processed crude to produce high-value products such as gasoline and diesel in two months.

Fuel supplies on the island nation are so low that the government has told citizens to stop waiting in long lines at filling stations. The government has run out of foreign reserves to pay for essential imports.

Last week, newly-appointed prime minister, Ranil Wickremesinghe, said his government needed $75 million for critical imports such as crude.

“At the moment, we only have petrol stocks for a single day. The next couple of months will be the most difficult ones of our lives.

“We must prepare ourselves to make some sacrifices and face the challenges of this period,” Wickremesinghe said. 

Ship-tracking data compiled by Bloomberg shows the Nissos Delos tanker carrying Siberian Light has moved towards a mooring point where it can begin discharge operations. The vessel loaded up on March 29 at Novorossiysk, a port city on the Black Sea in southern Russia.

Bloomberg wasn’t exactly sure how Sri Lanka paid for the Russian crude, considering it owes more than $50bn in overseas debt. It’s seeking a $4bn loan from the IMF and has asked China to renegotiate at least $3.5bn in debt.

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Hedges: No Way Out but War

Hedges: No Way Out but War

Permanent war has cannibalized the country. It has created a social, political, and economic morass. Each new military debacle is another nail in the coffin of Pax Americana.
Original Illustration by Mr. Fish — “No Guts No Glory”

The United States, as the near unanimous vote to provide nearly $40 billion in aid to Ukraine illustrates, is trapped in the death spiral of unchecked militarism. No high speed trains. No universal health care. No viable Covid relief program. No respite from 8.3 percent inflation. No infrastructure programs to repair decaying roads and bridges, which require $41.8 billion to fix the 43,586 structurally deficient bridges, on average 68 years old. No forgiveness of $1.7 trillion in student debt. No addressing income inequality. No program to feed the 17 million children who go to bed each night hungry. No rational gun control or curbing of the epidemic of nihilistic violence and mass shootings. No help for the 100,000 Americans who die each year of drug overdoses. No minimum wage of $15 an hour to counter 44 years of wage stagnation. No respite from gas prices that are projected to hit $6 a gallon.

The permanent war economy, implanted since the end of World War II, has destroyed the private economy, bankrupted the nation, and squandered trillions of dollars of taxpayer money. The monopolization of capital by the military has driven the US debt to $30 trillion, $ 6 trillion more than the US GDP of $ 24 trillion. Servicing this debt costs $300 billion a year. We spent more on the military, $ 813 billion for fiscal year 2023, than the next nine countries, including China and Russia, combined.

We are paying a heavy social, political, and economic cost for our militarism…

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Supply Chain Congestion Set To Worsen As Container Rates Rebound On Easing China Lockdowns 

Supply Chain Congestion Set To Worsen As Container Rates Rebound On Easing China Lockdowns 

Update (Friday): The locked-down megacity of Shanghai eased pandemic restrictions this week and will see public transportation networks reopen as soon as Sunday. After two months, the city of 26 million people appears to have contained the spread of COVID-19 via China’s zero COVID policy.

Restarting Beijing could be problematic for the rest of the world. We laid this out Thursday. The city’s lockdown and reduced port capacity created a massive backlog of products that need to be loaded on container ships and hauled westward.

Maersk and Goldman Sachs (in two separate reports) outlined the immediate restart of Beijing would create renewed global supply chain congestion.

We told readers to monitor trans-Pacific container freight rates closely as a proxy for China’s restart.

New data from Fearnley Securities indicates container rates have finally rebounded after slumping for much of this year. This is an early indication that economic activity in Shanghai could be increasing as pandemic restrictions ease.

Fearnley’s Peder Nicolai Jarlsby expects a surge in freight volumes as container rates increase. He added this would be a bullish development for shares of A.P. Møller – Maersk A/S, the world’s largest container shipping company by capacity, and shipper Hapag-Lloyd.

Focusing on 40ft container freight rates on the Shanghai-Los Angeles shipping lane, prices have found higher lows and appear to be turning up after a 30% decline since peaking last September.

Goldman warned earlier this week: “We could see a resurgence of ship bottlenecks if sudden restarts in China lead to renewed sailings all at once.”

And if that’s the case, container rates for major shipping lines in the trans-Pacific region could increase more as shipping volumes surge. This would mean renewed supply chain congestion could hit US shores in late summer, perfect timing ahead of the US midterm elections.

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Megalopolis x Russia: Total War

Megalopolis x Russia: Total War

After careful evaluation, the Kremlin is rearranging the geopolitical chessboard to end the unipolar hegemony of the “indispensable nation”.

But it’s our fate / To have no place to rest, / As suffering mortals / Blindly fall and vanish / From one hour / To the next, / Like water falling / From cliff to cliff, downward / For years to uncertainty.

Holderlin, Hyperion’s Fate Song

Operation Z is the first salvo of a titanic struggle: three decades after the fall of the USSR, and 77 years after the end of WWII, after careful evaluation, the Kremlin is rearranging the geopolitical chessboard to end the unipolar hegemony of the “indispensable nation”. No wonder the Empire of Lies has gone completely berserk, obsessed in completely expelling Russia from the West-centric system.

The U.S. and its NATO puppies cannot possibly come to grips with their perplexity when faced with a staggering loss: no more entitlement allowing exclusive geopolitical use of force to perpetuate “our values”. No more Full Spectrum Dominance.

The micro-picture is also clear. The U.S. Deep State is milking to Kingdom Come its planned Ukraine gambit to cloak a strategic attack on Russia. The “secret” was to force Moscow into an intra-Slav war in Ukraine to break Nord Stream 2 – and thus German reliance on Russian natural resources. That ends – at least for the foreseeable future – the prospect of a Bismarckian Russo-German connection that would ultimately cause the U.S. to lose control of the Eurasian landmass from the English Channel to the Pacific to an emerging China-Russia-Germany pact.

The American strategic gambit, so far, has worked wonders. But the battle is far from over. Psycho neo-con/neoliberalcon silos inside the Deep State consider Russia such a serious threat to the “rules-based international order” that they are ready to risk if not incur a “limited” nuclear war out of their gambit…

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Collapse Is Happening Before Our Eyes

Collapse Is Happening Before Our Eyes

Analysts and authors, myself included, have been warning about the collapse of the dollar as the global reserve currency for years. I described this prospect in my first book, Currency Wars (2011), and in several other books in the years since.

This process can take many years. For example, the decline of sterling as the leading global reserve currency played out over 30 years from 1914 (the beginning of World War I) to 1944 (the Bretton Woods conference).

Still, events today are playing out so quickly that the collapse is happening in front of our eyes.

It’s no longer a matter of a major event on the horizon; it’s occurring in real-time. Russia has just linked the ruble to gold at a rate of 5,000 rubles to one gram of gold. China is discussing with Saudi Arabia the prospect of paying for oil in yuan.

Israel is likewise considering taking yuan in exchange for its high-tech exports. China and Russia are creating new payments systems to avoid U.S. sanctions. You get the point.

Foreign Central Banks Aren’t Dumb

Central banks have been net buyers of physical gold since 2010. Countries all over the world are considering dumping dollars for fear that they will be next on the list to have their dollar assets frozen or seized the way the U.S. seized the dollar-denominated assets of the Central Bank of Russia.

That makes sense. What’s the point of holding dollars in your reserve positions if the U.S. can freeze those accounts on a whim? Americans tend to take dollar strength for granted, but that’s a mistake. It’s helpful at times like this to get a foreign perspective.

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China and Russia are working on homegrown alternatives to the SWIFT payment system. Here’s what they would mean for the US dollar.

China and Russia are working on homegrown alternatives to the SWIFT payment system. Here’s what they would mean for the US dollar.

Vladimir Putin and Xi Jinping
Russian President Vladimir Putin and Chinese President Xi Jinping. 
Getty Images
  • Some Russian banks have been banned from SWIFT, a cross-border messaging service for banks.
  • India was reportedly considering a Russian proposal to use the SPFS for payments in rubles.
  • Moscow is also working with Beijing to connect to the Chinese messaging system.

In the aftermath of Russia’s unprovoked invasion of Ukraine, some Russian banks were banned from SWIFT, the Belgium-based messaging service that lets banks around the world communicate about cross-border transactions. The ban has hampered cross-border transactions for Russia’s trade and financial systems, isolating the country economically.

Now, both Russia and China are looking to establish alternatives to the US dollar hegemony.

Russia is touting an alternative ruble-based payment system called the System for Transfer of Financial Messages (SPFS). The system was set up in 2014. In late April, the country’s central bank said it would start keeping the names of participants secret.

China’s Cross-Border Interbank Payment System (CIPS) — which processes payments in Chinese yuan — also has potential to replace SWIFT. The system has an expansive network of 1,280 financial institutions, said Peter Keenan, the cofounder and CEO of Apexx, a payments provider that used to work with Russia’s domestic Mir payment card. That’s compared to SPFS’ much smaller network of 400 users.

There are few alternatives to SWIFT, Keenan told Insider: “This is one of the reasons why Russia is looking to CIPS and an alternative for Asian payments specifically.”

Here’s how China and Russia’s SWIFT alternatives could cause disruptions in the global payments system and the dollar’s dominance.

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Empire of Lies Eager to Receive Mr. Sarmat’s Business Card

Empire of Lies Eager to Receive Mr. Sarmat’s Business Card

The only antidote to propaganda dementia is served by sparse voices of reason, which happen to be Russian, thus silenced and/or dismissed.

Especially since the onset of GWOT (Global War on Terror) at the start of the millennium, no one ever lost money betting against the toxic combo of hubris, arrogance and ignorance serially deployed by the Empire of Chaos and Lies.

What passes for “analysis” in the vast intellectual no-fly zone known as U.S. Think Tankland includes wishful thinking babble such as Beijing “believing” that Moscow would play a supporting role in the Chinese century just to see Russia, now, in the geopolitical driver’s seat.

This is a fitting example not only of outright Russophobic/Sinophobic paranoia about the emergence of peer competitors in Eurasia – the primeval Anglo-American nightmare – but also crass ignorance about the finer points of the complex Russia-China comprehensive strategic partnership.

As Operation Z methodically hits Phase 2, the Americans – with a vengeance – have also embarked on their symmetrical Phase 2, which de facto translates as an outright escalation towards Totalen Krieg, from shades of hybrid to incandescent, everything of course by proxy. Notorious Raytheon weapons peddler reconverted into Pentagon head, Lloyd Austin, gave away the game in Kiev:

“We want to see Russia weakened to the degree that it can’t do the kinds of things that it has done in invading Ukraine.”

So this is it: the Empire wants to annihilate Russia. Cue to War Inc.’s frenzy of limitless weapon cargos descending on Ukraine, the overwhelming majority on the road to be duly eviscerated by Russian precision strikes. The Americans are sharing intel 24/7 with Kiev not only on Donbass and Crimea but also Russian territory…

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Olduvai IV: Courage
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Olduvai II: Exodus
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