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What does the latest IPCC report mean for energy companies?

The success of energy stocks is largely driven by the climate change narrative. Are oil & gas stocks really the enemy while renewables reign supreme?
The post What does the latest IPCC report mean for energy companies? appeared first on Value the…



The United Nation’s Intergovernmental Panel on Climate Change (IPCC) recently released a hard-hitting scientific report into the impact climate change has on our planet – and it’s not good news.

The organization called the report a ‘code red for humanity’ in its first major review of the science of climate change since 2013. At the heart of the report is the strongly-worded statement that human influence has warmed the planet’s atmosphere, oceans and land.

A vital precursor to COP26

The IPCC report is also released just three months before the hugely important COP26 climate change summit in Scotland in November – The 2021 United Nations Climate Change Conference.

This wake-up call from the UN urges governments to crack down on the fossil fuel industry, and take a more active interest in moving the world to renewable resources. The world has become increasingly reliant on fossil fuels during the past 50 years, with fossil fuel production being one of the primary industries to blame for climate change.

Impact on renewable energy stocks

With governments taking note, it stands to reason that renewable energy companies will become the natural beneficiaries of the IPCC report. Therefore, investing in renewable infrastructure and overhauling the regulatory environment for green energy alternatives is likely to be front and center going forward.

Photographer: Markus Spiske | Source: Unsplash

Companies are also being pressured to go green, which will have a far-reaching effect on industries everywhere. That’s because fossil fuels infiltrate society and businesses globally.

Fossil fuels amount to a multi-trillion-dollar industry. That’s a massive market ready for disruption.

Gauging market sentiment

As investments, renewable energy stocks have produced mixed results in recent years.

While the theme is desirable, often, the costs in producing renewable energy run high, and margins are thin. Costs are undoubtedly coming down, but the industry is still fraught with challenges.

The practicality of changing to renewable fuels such as hydrogen is not as simple or profitable as continuing with conventional energy sources. So, to sweeten the appeal, government subsidies are often necessary.

See how Tesla profits from carbon credits as an example of this at work.

One way to get an overview of sector sentiment is to look at index performance.

The NASDAQ OMX Renewable Energy Generation index (INDEXNASDAQ: GRNREG) is designed to track companies producing energy from sources such as solar, wind, geothermal, wave, and fuel cells.

This index rose over 50% between September 2020 and January 2021. It’s since slipped 31%.

The Biden administration has a strong stance on going green. Therefore, before taking office in January, Biden’s impending inauguration generated considerable buzz around renewable energy stocks.

After the President resubmitted the US to the Paris Agreement and laid out his plans for a climate change push, the stocks that had enjoyed a preemptive rise began to pull back. This may explain the drop in the renewables index.

Choosing renewable energy investments

There are literally hundreds of renewables companies to invest in, and deciding where to allocate funds can be difficult. With so many newcomers it’s unlikely they will all succeed. Therefore investing in small-cap renewable energy stocks is risky.

Many have been overhyped and subject to extreme volatility.

Is renewable energy a good investment?

Check out our handy guide: Is renewable energy a good investment?

Brookfield Renewable (NYSE: BEP) is one of the world’s largest investors in renewable power, including hydro, wind, and solar. It recently reported excellent Q2 results. Brookfield Renewable stock is up 30% in a year but down 13% year-to-date. It offers shareholders a 2.9% dividend yield.

Albemarle (NYSE: ALB) is one of the largest lithium producers in the world. Lithium is a hot resource because it is a vital component of EV batteries. The Albemarle share price is up 48% year-to-date and 146% in a year. It offers investors a 0.7% dividend yield.

Electric battery and solar company NextEra Energy (NEE) has seen its share price rise 8.8% year-to-date and 18% in a year. It offers shareholders a 1.8% dividend yield.

Sunrun (NASDAQ: RUN), a residential solar energy company, has performed badly, with its stock plummeting 36% year-to-date.

Hydrogen stock Plug Power (NASDAQ: PLUG) has fallen 25% year-to-date but is up 105% in a year. It doesn’t offer a dividend yield.

Choosing renewable energy stocks solar
Photographer: Jordan Wozniak | Source: Unsplash

How will the IPCC report affect the future of fossil fuel stocks?

Fossil fuel stocks include those companies operating in oil and gas (petroleum, natural gas, and shale oil) and coal.

The report said this past decade has been hotter than any period in 125,000 years.

Thankfully global warming can be slowed with swift and strategic action. Better still, almost as soon as emissions are removed, global warming will end, and temperatures will stabilize over a couple of decades.

However, the more extreme changes, such as rising sea levels and acidic oceans, could take a lot longer to fix.

Therefore, the world’s major polluters from oil and gas, construction, and shipping, among others, must brace themselves for disruption.

With the burning of fossil fuels largely to blame, there’s a target on the back of oil and gas. But both oil and natural gas continue to play a vital role in society, and it’s going to take some time for that to change.

In addition to decarbonization, the oil industry must be equipped to clean up oil spills, safely decommission rigs and plug shale oil fracking wells safely and securely.

Contradictions and conflicts of interest

The IPCC report issues a stark warning that time is running out. Therefore, the pressure is on to dismantle the world’s oil industry and move to renewable sources.

But this transition is far from easy, and the intricacies of the two industries are more entwined than it may seem.

China is moving heavily into renewables while also ramping up its production of coal-fired power plants to drive its post-pandemic economy. Meanwhile, Oil majors are moving into renewables.

Indeed, Big Oil is taking the transition seriously and playing both sides of the coin. This seems wise, considering they have so much industry expertise and money at their disposal.

BP (NYSE: BP) plans to invest $3bn to $4bn annually by 2025 as it extends its integrated portfolio of low carbon technologies, including renewables, bioenergy, and EV charging infrastructure.

Exxon Mobil (NYSE: XOM) is being forced into taking the situation more seriously since activist investors took three board seats.

Like Exon, Shell (NYSE: RDSB) is at the mercy of climate activists. It intends to reduce its carbon intensity average by 20% by 2030, but that’s a lot less than the activists are calling for.

Meanwhile, Maersk (CPH: MAERSK-B) is a major in deep-sea drilling and international shipping, both significant carbon polluters. But it’s making serious inroads into carbon capture techniques and R&D in sustainability.

Read: Momentum-driven energy stocks to consider

Can a world run on renewables weather natural disasters?

While extreme weather events have occurred since the beginning of time, there does appear to be a notable increase in the frequency and severity of natural disasters happening around the world today.

Traditionally cold places are now enjoying warmer climates, while hot countries are experiencing unbearable heat waves.

This year alone, we’ve witnessed a major freeze across Texas in February, flooding throughout Germany and China in July, the Haiti Earthquake in August, while Greece is experiencing its worst heatwave in thirty years.

Unfortunately, the situation in Texas exposed problems in both the oil and gas industry and the renewables industry.

The state’s grid wasn’t sufficiently prepared to cope with the electricity crisis. Its primary grid experienced extreme outages, unable to service the rise in demand.

Turbines froze, and wind generators went offline, while thermal sources, including coal, nuclear, and mainly natural gas, also froze or had their supplies limited as certain customers were given priority.

Virtue Signalling

Big Oil is far from perfect, but these firms adhere to much stricter health and safety standards and scrutiny than many foreign counterparts. By shutting them down, the production doesn’t stop. It just moves to parts of the world where human life has less value, and the risk of spills and leaks is far higher.

The trouble is if the West immediately cease oil production and decommission all their rigs. Many jobs and livelihoods will be destroyed in the process.

Meanwhile, the West remains reliant on consuming oil, so rather than produce it, they’ll be forced to import it. Thereby handing the oil production to regions of the world with less scrutiny and regulation.

Saudi Arabia, Russia, China, and many emerging markets will happily flood the market with oil. So, the problem will not be solved. Instead, the Western governments and companies tick a virtue-signaling box that looks good in meeting climate targets.

The United Kingdom’s response to the IPCC report

To reach net-zero emissions by 2050, the International Energy Agency (IEA) warned no new oil and gas fields could be approved for development.

With the upcoming COP26 summit holding the UK in high esteem, the UK government is under pressure to cancel a major oil development project in the North Sea.

Off the coast of Shetland, the Cambo oilfield is a significant project for Shell. It provides many jobs and contains around 800m barrels of crude, with Deepwater drilling starting next year.

Responding to the IPCC report, Scotland’s First Minister Nicola Sturgeon voiced her concerns on Twitter:

Nicola Sturgeon responds to the IPCC report 2021

Australia’s response to the IPCC report

Much like the United States, Australia is one of the top fossil fuel-exporters in the world.

It has a massive mining industry, yet Australia still refuses to take responsibility for its role in carbon emissions.

Prime Minister Scott Morrison says industry should be looking at technological ways to solve climate change while developing “safe” strategies to extract resources. Suggestions include storing coal underground or capturing methane before burning.

This defensive response is evident throughout the country. The nation’s miners are looking at ways to deliver the raw materials required for global decarbonization safely.

Meanwhile, the Australian Petroleum Production & Exploration Association said its oil and gas producers are leading the development of technologies such as carbon capture and storage.

While Coronado Global Resources Inc. (ASX: CRN), which mines metallurgical coal used in steelmaking, said its production is cleaner than that from Russia, Mongolia, or South Africa.

Gerry Spindler, CEO of Coronado Global Resources, said:

“You need steel to support alternative sources of energy, you’re going to need steel to replace the infrastructure”.

Japan’s response to the IPCC report

Sumitomo Corp. (TYO: 8053) is a diversified Japanese trading house operating internationally. The company’s investments include coal, but it claims to be attempting to cut its exposure to excessive CO2 emissions.

For instance, it’s selling a 12.5% stake in Rolleston thermal coal mine in Australia to Glencore (LON: GLEN). While it also recently announced the sale of its 50% stake in Avalon oilfield to Ping Petroleum UK Ltd.

What’s the solution?

Despite all the cries to cease oil production, many experts believe oil demand will continue to grow. That’s because third-world nations strive to live in the perceived comfort of the Western world. And to get there, they need oil.

However, The IEA said rising demand for crude oil is expected to slow throughout the rest of this year as Covid-19 still rages.

To combat rising oil demand, a viable alternative is required. That’s a low-cost, reliable, global-scale energy made from renewable sources. But as of now, no such alternative exists.

Can renewable energy replace the oil and gas industry?
Photographer: American Public Power Association | Source: Unsplash

Nuclear energy poses a potential solution, while hydrogen and natural gas could also play an important role.

Microsoft Billionaire Bill Gates said:

“Nuclear is ideal for dealing with climate change, because it is the only carbon-free, scalable energy source that’s available 24 hours a day.”

He has created a nuclear innovation company called TerraPower but it’s not publicly traded.

But these solutions have their own pitfalls and opposition.

Nuclear energy is feared for its potential to cause widespread destruction, and hydrogen is not yet cost-effective. In fact, a recent study in heating showed blue hydrogen to be 20% worse for greenhouse gas emissions than natural gas.

With the facts and goalposts constantly changing and so many variable factors at play, it’s impossible to predict where we’ll be in the next ten years.

Even with decarbonization well underway, oil and gas stocks will continue to be seen in a bad light. So, institutional money is likely to be allocated to renewables over fossil fuels.

There are a small number of active institutional managers in a position to continue investing in oil and gas. But whether they will feel brave enough remains to be seen. The money to be made may be too tempting to ignore, but the flip side is how badly it will reflect on their reputation.

The post What does the latest IPCC report mean for energy companies? appeared first on Value the Markets.

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China Coal Prices Soar To Record As Winter Freeze Spreads Across The Country

China Coal Prices Soar To Record As Winter Freeze Spreads Across The Country

One week ago we discussed why the "worst case" scenario for China’s property crisis is gradually emerging; to this we can now add that China’s worst case energy…



China Coal Prices Soar To Record As Winter Freeze Spreads Across The Country

One week ago we discussed why the "worst case" scenario for China's property crisis is gradually emerging; to this we can now add that China's worst case energy crisis scenario is also about to be unleashed as cold weather swept into much of the country and power plants scrambled to stock up on coal, sending prices of the fuel to record highs.

Electricity demand to heat homes and offices is expected to soar this week as strong cold winds move down from northern China, according to Reuters with forecasters predicting average temperatures in some central and eastern regions could fall by as much as 16 degrees Celsius in the next 2-3 days.

Shortages of coal, high fuel prices and booming post-pandemic industrial demand have sparked widespread power shortages in the world's second-largest economy. Rationing has already been in place in at least 17 of mainland China's more than 30 regions since September, forcing some factories to suspend production and further disrupting already broken supply chains.

On Friday, the most-active January Zhengzhou thermal coal futures closed at a record high of 2,226 per tonne early. The contract has risen almost 200% year to date.

China's three northeastern provinces of Jilin, Heilongjiang and Liaoning - also among the worst hit by the power shortages last month - as well as several regions in northern China including Inner Mongolia and Gansu have started winter heating, which is mainly fuelled by coal, to cope with the colder-than-normal weather.

Meanwhile, even though Beijing has taken a slew of measures to contain coal price rises including raising domestic coal output and cutting power to power-hungry industries and some factories during periods of peak demand, so far all measures have failed with coal surging by 40% in just the past three days. Beijing has also repeatedly assured users that energy supplies will be secured for the winter heating season, and went so far as to order energy firms to "secure supplies at all costs." Well, the energy firms heard it, because on that day, thermal coal closed at 1,436 yuan. Two weeks later it is some 800 yuan higher.

Unfortunately for Beijing, the power shortages are expected to continue into early next year, with analysts and traders forecasting a 12% drop in industrial power consumption in the fourth quarter as coal supplies fall short and local governments give priority to residential users.

Earlier this week, we reported that China undertook its boldest step in a decades-long power sector reform when it allowed coal-fired power prices to fluctuate by up to 20% from base levels from Oct. 15, enabling power plants to pass on more of the high costs of generation to commercial and industrial end-users. read more

Steel, aluminium, cement and chemical producers are expected to face higher and more volatile power costs under the new policy, pressuring profit margins.

Meanwhile, the latest Chinese "data" on Thursday showed factory-gate inflation in September hit a record high; but since thermal coal is the one commodity that correlates the closest to PPI, absent a sharp drop in coal prices in the next few weeks, expect the next PPI print to be far higher. Meanwhile as the power crisis leads to further shutdowns in domestic production, some banks - such as Nomura - have gone so far to predict that China's GDP is set to shrink in coming quarters.

China, which laughably aims to be "carbon neutral" by 2060 even as its president announced he will skip the COP26 UN Climate Change Conference in Glasgow, has been "trying" to reduce its reliance on polluting coal power in favor of cleaner wind, solar and hydro. But coal remains the source for some 70% of China's electricity needs.

Of course, China is not the only nation struggling with power supplies, which has led to fuel shortages and blackouts in many European countries. and threatens to send US heating bills up as much as 50% this winter. he crisis has highlighted the difficulty in cutting the global economy's dependency on fossil fuels as world leaders seek to revive efforts to tackle climate change at talks next month in Glasgow.

China will strive to achieve carbon peaks by 2030, Vice Premier Han Zheng said in a video message at the Russian Energy Week International Forum, according to state-run news agency Xinhua late on Thursday. He also said that China and Russia are important forces leading the energy transition and they should cooperate and ensure smooth progress of major oil and gas pipeline and nuclear power projects.

Translation: Russia better save that nat gas and not ship it to Europe as China will soon be needed even BCF Russia an provide. As for China


Tyler Durden Fri, 10/15/2021 - 22:50

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Distraction As Policy While Our Economic Rome Burns

Distraction As Policy While Our Economic Rome Burns

Authored by Matthew Piepenberg via,

Desperation and distraction are masquerading as economic policy. Below we see how and why…and at what cost…

COVID: The Great..



Distraction As Policy While Our Economic Rome Burns

Authored by Matthew Piepenberg via,

Desperation and distraction are masquerading as economic policy. Below we see how and why...and at what cost...

COVID: The Great Economic and Political Hall-Pass

If every time I stole a cookie from the jar in front of my mom (age 8), or drove dad’s car (sometimes into a tree) without permission (age 16), failed a dorm-room inspection (age 17), broke a lawnmower for driving over a fence post (each year) or forgot a key anniversary (eh-hmm), it would have been so convenient to have a universal “hall pass” to excuse what is/was otherwise just plain stupid behavior.

Luckily for the grown children running our global financial system into the ground, the COVID pandemic is becoming precisely that: “A global hall pass for excusing decades of stupid.”

As we’ve written many times, inexcusably high debt levels, tanking growth data, struggling work force figures, embarrassing wealth disparity and insider market rigging between Wall Street and DC was well in play long before COVID made the headlines.

But now, the architects of such “pre-COVID stupid” have the current COVID narrative to justify and excuse even, well… more stupid.

The Latest Jobs Report “Explained” …

Take, for example, the latest job reports data from those DC-based creative writers at that comic-book publication otherwise known as the Bureau of Labor Statistics (BLS).

Known for years on Wall Street as mathematical magicians capable of turning 12% inflation into a 2% CPI lie, that same BLS is operating yet again to fib away the latest (and otherwise telling) jobs data.

The September jobs report was the second consecutive and disappointing report from the BLS, which they were quick to blame on “pandemic-related staffing fluctuations.”

Hmmm. That’s a nice phrase, no? “Pandemic-related staffing fluctuations.”

But the real description boils down to something more PRAVDA-like under the new Biden Vaccine Mandate, namely: “Obey or we take your job away.”

Needless to say, not everyone is obeying.

Since 2020, employment in local government education is down by 310,000; in state government education, employment is down by 194,000 jobs, and in private education the numbers are down by 172,000.


Why such “staffing fluctuations”?

The answer is simple: Many educated folks in the education sector don’t like being mandated to inject a vaccine into their bodies which by all reports from vaccinated infection rates, is no vaccine at all, but a debatable form of treatment at best.

Thankfully for all of us, I’m not interested in debating the hard vaccine data here, as folks like me should not be proffering unwanted medical expertise, which I clearly lack.

No one, myself included, really knows everything about mutating virology, but I’d wager to say that many of us are more mathematically dubious than Fauci is medically honest…

Jefferson (and History) Ignored

For followers of American history and markets, however, certain ideals and facts are easier to track despite distraction-as-policy tactics.

We are reminded, for example, of how passionately Thomas Jefferson warned us circa 1776 that a private central bank would eventually destroy our nation, and that only an educated population could save it.

Sadly, the new President is taking the inverse approach: Firing teachers and propping bankers.

Fast-forward some 240+ years from our founding fathers to our semi-conscious Biden, and we discover a nation wherein a private central bank effectively finances our national debt while the teachers, students and institutions charged with making citizens wiser, educated and free now find themselves locked out of their offices, classrooms and lecterns.

Seems a little upside down, no?

Red or blue, most of us can agree than nothing coming out of the White House in recent memory remotely resembles the vision or freedom-driven intellect of founding fathers like Jefferson, despite his known flaws.

Instead, we have seen red and blue administrations whose grasp on coherency, let alone math, history, economics or even Afghan geography is questionable at best.

Biden’s Response

And what does Biden (or his “advisors”) have to say about the recent and scary numbers within a gutted and “locked-out” educational labor force?

Well, you’ll have to see it to believe it..

Really? Really? Really?

That’s right folks.

The President of the United States, home to the world’s reserve currency and former beacon of global freedom, is telling Americans not to worry about the slow death of genuinely informed dissent (as well as educational access and jobs) or the attempted popularizing of otherwise tyrannical mandates, but to focus instead on the vaccine rates at United Airlines?

Yes. Really.

The leader of the free world is boastfully telling us that the “bigger story” is a fully vaccinated United Airlines (who were forced to choose between a jab or job), so why worry about the problems in that silly ol’ educational sector or outdated Bill of Rights?

Playing with Minnows While Ignoring Whales

Where ever one stands on the understandably divisive vaccine issue, how can anyone compare a private airline’s vaccine rate to a national education, civil liberty and employment crisis?

Why are politicians, Davos dragons, statisticians, media bobble-heads and central bankers focusing our/your attention more on a virus with a case fatality rate of less than 0.5% than they are on openly addressing whale-sized issues like unsustainable debt, rising inflation, embarrassing labor inequality, a dying currency or even more declining GDP?

Deliberate and Desperate Distraction as Policy

Well, history tells us why.

As anyone not banned from a classroom knows, the history of desperate leaders seeking to distract, censor and control the masses in times of a self-inflicted and debt-induced cycle of internal economic rot is long and distinguished.

As Biden doubles down on the bad (yet deliberately distracting) hand of what was hoped to be an optically humanitarian policy of vaccine mandates, the masses are getting restless as well as fired…


Criminalize the non-consenting as anti-vaccine, anti-science or anti-American “flat-earthers” while denying open discussion on such otherwise relevant topics as basic math, constitutional law, calm science or individual rights…

Meanwhile, those who won’t tow Biden’s increasingly incoherent mandate (or Don Lemmon’s always coherent ignorance) are losing jobs and/or forced to prioritize (in a Jeffersonian way) individual liberty over financial security.

Ben Franklin, of course, said those who surrender liberties for security deserve neither.

In such a polarized backdrop, everyone, pro or anti-vaccine, loses.

Informed, open and calm debate has been replaced by a contradictory, censored, sanctimonious and hysterical autocracy from prompt-readers to political puppets.

So much for leading the free world… Let me remind Biden to consider the words of another founding father, Thomas Paine:

“I have always strenuously supported the right of every man to his own opinion, however different that opinion might be to mine. He who denies to another this right, makes a slave of himself to his present opinion, because he precludes himself the right of changing it.”

As someone who studied and practiced constitutional law, worked within a rigged Wall Street and read nearly every book I could find on America’s founding fathers, I can say without hyperbole that I no longer recognize the country (or values) of my birth nation.

As Franklin also noted, “All democracies eventually die; usually by suicide.”


But let’s get off my high-horse and back to those job reports…

Conviction vs. Employment

As Bloomberg recently noted, the result of these “pandemic-related staffing fluctuations” is a bit alarming.

The following critical industries are witnessing the following job-loss percentages: Nursing and Residential Care (-1.26%); Local Government Education (-1.83%); Community Care for the Elderly (-2.20%) and lodging (-2.25%).

But thank goodness that despite a deliberate weaning of nurses, teachers and elderly care experts, United Airlines is nearly fully vaccinated and our Motion Picture Industry (universally known for its astounding political and financial wisdom) is seeing a +4.21% job increase.

Awe, but as Johny Mellencamp would say, “Aint that America?”

Now instead of more employed and free-thinking nurses, teachers and students allowed to gather, speak and think freely at their own campus or clinic, we can be glad that jobs in Hollywood, like DC, are growing to keep us living on more fantasy rather than actual, informed and hard-earned knowledge.

Oh, and the Economy…

But rather than just rant otherwise rhetorical sarcasm, let’s get back to those other barbaric (and soon-to-be empty) old-school disciplines like economics…

Biden’s mandates are more than just evidence of distraction as policy and constitutional interpretation/usurpation, they have direct impacts on our financial lives outside of the deliberately exaggerated vaccine debacle/debate.

Let’s go down the list of what economics taught us years ago, when we were allowed to enter a classroom:

  1. Stagflation Ahead.

As more and more folks are locked out of work, the entitlement costs for these “un-American” free-thinkers will rise, placing greater inflationary pressures upon a deliberately constrained rather than open economy.

Rising inflation + slowing economic activity = stagflation.

Prepare for this, as that’s what’s coming.

Inflation, by the way, is an invisible tax on those who can afford it the least. Thanks again Powell et al for shafting the middle class…

  1. A Divided States of America

A country which once revered open rather than censored debate, investigative rather than complicit journalism, and respected rather than polarized differences of opinion, is becoming increasingly factionalized, divided and angry.

Jab or no jab, I fully respect both views. Can’t we all do the same without a “mandate”?

Like Thomas Paine, I hope so, because as Thomas Jefferson warned, we face far greater economic and political threats ahead than COVID.

Rather than accountability, transparency and cooperation, leadership today is defined by fantasy and magic, from magical money created at the Fed to magical employment and CPI data downplayed at the BLS.

Such left or right fantasy-as-policy is as old as history—it’s darker side, that is. Just ask Lenin, Castro, Nixon or Greenspan.

Whenever backed into a debt corner of their own design, leaders employ a familiar combo of boogeyman and salvation narratives to divert the masses away from the slow-drip erosion of their personal liberties, dying currencies and debt-driven stagnation.

This distraction-as-policy is happening right now. The rise of the COVID narrative in 2020 is more than a coincidence. It’s a conveniently exploited opportunity for political and financial opportunists.

  1. More Centralized Controls and Fake Markets

With debt levels far beyond the Pale of productivity levels (i.e., embarrassing debt to GDP ratios), the U.S. and other developed economies are mathematically and factually unable to ever grow their way out of the debt hole they have been digging us into for years.

Period. Full stop.

If I know this, and if you know this, well…they certainly know this too in DC.

The only difference is that these policy makers, like most kids caught with a hand in the cookie jar, are incapable of admitting fault.

Instead, today’s “leadership” can blame their economic and policy failures (and self-preservation rather than “service” instincts) on something else—i.e., “COVID did it.”

But as we’ve voiced elsewhere, the debt time bomb, growth declines, social unrest, wealth disparity and failing political credibilities in play today were already a major problem BEFORE COVID.

Now, as then, the empirical data objectively confirms that tanking manufacturing data, jobs growth, economic productivity, broken supply chains, scary transport numbers and political mistrust can never service the over $28.5T in public debt sitting on Uncle Sam’s bar-tab.

As a natural result, we can therefore expect far more “accommodation” (i.e., monetary expansion) from the Fed, and far more “Fiscal Stimulus” (i.e., deficit spending) from our comical legislature ahead.

Stated otherwise: Get ready for more real debt, fake money, centralized controls and hidden wealth destruction.

Zombie Stocks, Bonds and Bankers: Too Big to Fail 2.0

Sadly, one of the only forms of income which Uncle Sam enjoys today is the capital gains receipts from a bloated, rigged and artificially Fed-supported stock market.

This means we can anticipate more “stimulus” for a zombie, crack-up-boomed market well past its natural expiration date.

The same is true of for government IOU’s.  No one wants our bonds. 2020 saw $500B in foreign outflows rather than inflows for US Treasuries.

So, who will pay Uncle Sam’s bar tab now?

Easy:  Uncle Fed at the Eccles Building down the avenue from a Treasury Department now led by a former Fed Chairwoman.

One really can’t make this crazy up. It’s all that real, that rigged and that true.

The U.S. debt crisis is now being “solved” by a circular loop of a Wall Street and a White House children tossing their hot potatoes of bad debt (MBS and sovereign) around until they are bought with money created out of thin air by the Fed.

And yet despite such insider support, rigged markets and “accommodated” securities, even the rising tax receipts from these bloated markets are not enough to cover the interest expense on Uncle Sam’s bar tab.

In short, US Treasury bonds and stocks are openly supported Frankenstein-assets kept alive by a central bank and White House cabal (sorry, Mr. Jefferson…) who blame every problem (and justify every expenditure) on a virus rather than confess to the cancerous reality of over 20+ years of their open and obvious mismanagement of a rigged banking and distorted financial system.

But rather than account for such sins, we can expect a bigger bail-out rather than an honest confession…

In 2008, for example, the response from DC and NYC to bankers gone mad was to declare bankrupt banks as “Too Big to Fail.”

Fast-forward some 13 years later and that same toxic duo of bankers and politicos have now effectively telegraphed that bankrupt government bonds and private stocks are also “too big to fail.”

That ought to anger an informed population. But instead, we are fighting about masks, vaccine shaming and Prince Harry’s sensitive upbringing.

So far, the distraction-as-policy technique seems to be working in favor of the foxes guarding our financial henhouse.

Signal More Currency-Debasing “Miracle Solutions”

Which brings us right back to a harsh but increasingly undeniable yet ironic reality.

If objectively broken bonds, stocks and financial regimes are too big to fail, then the only way to “save” them is with more mouse-click-created currencies which are too debased to succeed.

As precious metal and other long-term, real-asset investors long ago understood, currency expansion is just another name for currency debasement.

In other words, eventually, all that “system saving” new money simply drowns the system it was allegedly designed to save in ever more debased dollars.

Again, it’s just that tragic and just that simple.

Yes: More monetary and debt expansion can buy time and rising markets.

But those markets are measured in currencies which time has equally taught us lose their value with each passing second.

And the only ones paying for that time are you and I–with dollars, euros, yen and pesos whose purchasing power and inherent value are tanking faster than the credibility of the folks who brought us to this historical and debt-driven turning point.

Stated bluntly: The financial and political leadership of the last 20+ years has placed the global financial system into a debt corner for which there is no exit other than deliberate inflation (and hence currency debasement).

This foreseeable disaster, however, is now conveniently blamed on a current pandemic rather than a grotesque history of equally grotesque mismanagement by policy markets who have confused debt with prosperity and double-speak with accountability.

Wouldn’t it be nice if such economic topics were making at least as many headlines as the latest infection rates?

Meanwhile, the mainstream media pursues plays chess with context-empty headlines, bogus job data and ignored debt bombs as our economic Rome (and currencies) burns silently around us all.

Tyler Durden Sat, 10/16/2021 - 10:30

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Spread & Containment

Huge Dock Worker Protests In Italy, Fears Of Disruption, As Covid ‘Green Pass’ Takes Effect

Huge Dock Worker Protests In Italy, Fears Of Disruption, As Covid ‘Green Pass’ Takes Effect

Following Israel across the Mediterranean being the first country in the world to implement an internal Covid passport allowing only vaccinated citize



Huge Dock Worker Protests In Italy, Fears Of Disruption, As Covid 'Green Pass' Takes Effect

Following Israel across the Mediterranean being the first country in the world to implement an internal Covid passport allowing only vaccinated citizens to engage in all public activity, Italy on Friday implemented its own 'Green Pass' in the strictest and first such move for Europe

The fully mandatory for every Italian citizen health pass "allows" entry into work spaces or activities like going to restaurants and bars, based on one of the following three conditions that must be met: 

  • proof of at least one dose of Covid-19 vaccine

  • or proof of recent recovery from an infection

  • or a negative test within the past 48 hours


It's already being recognized in multiple media reports as among "the world's strictest anti-COVID measures" for workers. First approved by Italian Prime Minister Mario Draghi's cabinet a month ago, it has now become mandatory on Oct.15.

Protests have been quick to pop up across various parts of the country, particularly as workers who don't comply can be fined 1,500 euros ($1,760); and alternately workers can be forced to take unpaid leave for refusing the jab. CNN notes that it triggered "protests at key ports and fears of disruption" on Friday, detailing further:

The largest demonstrations were at the major northeastern port of Trieste, where labor groups had threatened to block operations and around 6,000 protesters, some chanting and carrying flares, gathered outside the gates.

    Around 40% of Trieste's port workers are not vaccinated, said Stefano Puzzer, a local trade union official, a far higher proportion than in the general Italian population.

    Workers at the large port of Trieste have effectively blocked access to the key transport hub...

    As The Hill notes, anyone wishing to travel to Italy anytime soon will have to obtain the green pass: "The pass is already required in Italy for both tourists and nationals to enter museums, theatres, gyms and indoor restaurants, as well as to board trains, buses and domestic flights."

    The prime minister had earlier promoted the pass as a way to ensure no more lockdowns in already hard hit Italy, which has had an estimated 130,000 Covid-related deaths since the start of the pandemic.

    Meanwhile, the requirement of what's essentially a domestic Covid passport is practically catching on in other parts of Europe as well, with it already being required to enter certain hospitality settings in German and Greece, for example. Some towns in Germany have reportedly begun requiring vaccination proof just to enter stores. So likely the Italy model will soon be enacted in Western Europe as well.

    Tyler Durden Sat, 10/16/2021 - 07:35

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