The world starts to feel the crunch – let the pain begin ~_*

The abundance of news isn’t helping, nor the repetition. We all begin to realise the importance of energy and without alternative energy we will be held ransom. As smart as we seem to be be, we fail ourselves in a new crisis, an energy crisis. It’s not a crisis alone it’s the burden it carries and the timing of the crisis – after years of Covid a new pain seems intolerable.

Sitting in Europe we start to see that the prices of energy are increasing dramatically. Those who use wood pellets see prices rising by threefold. Those with traditional energy will feel the crunch not only because it’s winter, but in general the cost of energy is rising day by day.

It seems as if governments step up their spending, so what does all this mean at the end of the day-? Do many currencies devalue as we see the British pound pounded. In Europe there’s going to be a significant issue with fossil energy and perhaps that’s not yet taken into account. I guess Europeans will all need to chip in and governments will need to offer support, something they are used to doing since Covid. But there is going to be a tremendous cost not only to governments but in rising inflation. If the €’s purchase power parity slides into the toilet , so will the political arena and it is a matter of time unless we restore ecnomies.

The dollar is rising against all currencies and for a good reason including the US has plenty of oil and is taking the right steps towards curbing inflation. What is worse inflation with governments losing control of the political and financial arena or stepping in and doing what must be done.

Although we watch stock markets in anticipation as they go down no one knows what tomorrow holds. What we know is that we have inflation and interest rates are likely to rise. The consequences are more obvious as we enter a so-called recession. But this is not a true recession as we know it, it is induced by governments trying to control the money supply and bring liquidity and pricing under check.

The Fed knows what they are doing yet they hold the global economies at ransom – rising interest rates is slowing the economy and attracting Government debt. The concern stagflation means the economy shrinks, unemployment increases and prices rise and many more people starve – unemployed are already out of the work force after Covid taught them a life lesson. It is more important to live than to work, and living life is more about working less.

The misery index is meant to measure the degree of economic distress felt by everyday people, due to the risk of (or actual) joblessness combined with an increasing cost of living. The misery index is an economic indicator, created by economist Arthur Okun. The index helps determining how the average citizen is doing economically and it is calculated by adding the seasonally adjusted unemployment rate to the annual inflation rate.And, as I see it we are coming into a Stagflation right now – and IMF leaders and the Fed gives the signal, the economy is going to jitter.

I know numerous commercial and retail suppliers are still pretending on rising prices (and I am not sure why) except to protect their production and profits. The greed factor doesn’t help us get through these difficult times and we all need to see the bigger picture. Take into consideration we are in the middle of a hard road ahead.

Clearly labor markets are being stunted by workers reconsidering lifestyle as a priority, a priority we hadn’t seen before Covid. Now we have shortages and ask ourselves what happened. Many believe the shortages will equaliberate in the next years as we get used to labor shortages. It is these very shortages influencing the rise in salaries another economic factor to consider. It is reported, ‘The white-hot labor market has driven up wages faster than at any time since the mid-1980s, as employers struggle to attract – and retain – workers.

The median hourly wage for full-time workers was $1.70 higher in April than it was a year earlier. For those with a 40-hour work week, that is an increase of $68 a week – the highest since the bank began keeping records in 1997. Full-time workers are making 6% more than they were in April 2021. Over the course of a year, the boost in pay would come to $3,536.’ And at the same time inflation is eating away at their earnings.

Consumers are feeling caught between the rising costs and thoughts of a real recession. Nigeria’s Minister of Finance Ngozi Okonjo-Iweala has the right idea when she speaks about searching solutions for the current economic turndown. But the news we read and listen every day is annoying speculation. We need to talk more about solutions and accept the US is leading the way.

We cannot simply ignore the signs of worry leading marketing giants like Apple cut production before the launch of their new iPhone. It’s not important how many units they’re cutting, it’s more about the fact that they are cutting and they are not alone. Almost all businesses will be forced to cut, and if you talked to executives six months ago they would talk about hiring but that’s not going to be the case. I do see the positive in Apple and Meta’s pre-emptive strike in taking fast action. It wiped out $120 Billion of apples wealth in a matter of one downgrade. It becomes apparent 2022 will be a rocky road until 2023 and …..I hear lots of opinions about 2023. We need to see the end to the war, a stabilisation and after people starve and realise they must return to work unless governments still hand out subsidies.

The fact there are geopolitical problems add some dimension of concern we cannot ignore what’s going on in Russia, China, Taiwan, North Korea and in South Korea. The Americans are posturing while the Chinese are developing their military. This is a sub set of issues we are facing and if the Chinese decide to protect their expanding territories in the south sea of china it could get messy.

We cannot ignore the fact Republic of China has its mind set on dominating the south sea of china and America is trying to preserve this maritime Silk Road integral to world power. The South China Sea is a bitterly contested maritime battleground for state sovereignty, oil and gas and, perhaps above all, for the marine resources on which large populations of the Southeast Asia depend for their fish-based protein diet and for income.

Historically, the south sea of china has for centuries been a zone of connection as much as a zone of separation or conflict, connecting China with mainland Southeast Asia, the Malay World and further regions through commercial, religious and ethnic networks. The Maritime Silk Road conditioned the rise and fall of political entities—states and empires—in Southeast Asia. In the contemporary post-Cold War period this Maritime Silk Road has resurfaced as one of the axes of global trade but this, as the chapter shows, is compounded by modern territorial claims to the seas themselves. An early map showing a U-shaped eleven-dash line was first published by the Republic of China government on 1 December 1947. Two of the dashes in the Gulf go Tonkin were later removed after a treaty with Vietnam, reducing the total to nine from 11.

Compounded by pollution, China’s massive construction of artificial islands in the Paracels and Spratlys and the depletion of the fishing stocks demonstrates China’ new regional and transregional initiatives.

Wind the clock forward and here we are in the new age of political divide, and no one knows when the war begins, or did it already start-? It is obvious since the developments of Drones and satellite technologies there has been a serious interest in the technological age. This technological age is all about “chips” speed, rare-earth minerals, and the commodities we all need to increase performance., i.e. batteries, and the future of renewable energy. And the race is global with everyone focusing on technology developments, chemistry and science and chemical warfare and hypersonics:

We shouldn’t overlook the growing importance of batteries or semiconductors or rare earth minerals as this is the newest face-off amidst an already damaged relationship. It is a scary world as we depend more on machines, artificial learning, and the capabilities to develop advanced intelligence. We all know semiconductors is one of the focal points of the future geopolitical war. There has been much interest about this topic in the headlines and China and the US are racing to secure their respective positions.

If we wind the clock back to Huawei we know the arrest of the daughter the daughter the CFO of the tech giant’s billionaire founder Ren Zhengfei, has entered into a deferred prosecution agreement with the U.S government, her extradition was eventually dropped after 3 years. But this is just a taste of geopolitical maneuvers by the US government to stop China from having a foothold in the US market. In 2019, the US imposed sanctions on Huawei and placed it on an export blacklist, cutting it off from key technologies.

One of the biggest obstacles to making more chips in the United States is the lack of experienced workers. Part of the problem is structural, as Facebook and Google pay astronomically higher salaries than the chip manufacturing industry. Even in Taiwan, it has been hard to attract younger people to this work.” I have said in the past, Musk would have been better off to invest 22 billion and save 22 billion in his pocket by creating one of the leading technological centers in United States. But instead, the focus is on his ego and consequently there is an added ego cost to doing business.

And the race is global with everyone focusing on technology developments, chemistry and science and chemical warfare and hypersonics: https://www.nationaldefensemagazine.org/articles?PageNumber=1&Topic=%7B5991D1E0-7B9F-4AB4-8A0A-014CE2A12CE4%7D&FromDate=&ToDate=&Author=&Column=&Commentary=&KeyWord=

When you begin to understand the technological race we are facing it begins to become interesting as the US has no choice but to be strategic. The US needs to continue its ballistic missile defense program for the fleet using the SM-6 and laser weaponry. Third, the US has to shore up its alliances with Japan, South Korea, Australia and other regional countries to include the mutual defense of each other and Taiwan.

I am not sure how this ends, as our focus is more on the current war in Ukraine. I am positive to the extent I believe world leaders will find a solution to solving the Russian crisis. I heard talk of a coup d’état otherwise we face more tragedy and pain. Imagine, the energy crisis has destabilised our already weakened economy, and who would have thought sabotage – which makes sense if you wish to put an end to the supply.

Think about it, no more Russian oil flows here (below) and that is certain for the time being for Gazprom. However this pipeline wasn’t in use and is now out of use as it takes on sea water. It was a tactacal manoeuvre to take it out of the supply equation.

However Gazprom and Russian oil is simply a matter of fact and I am not sure how Europe can cut off all Russian gas without some serious consequences. Gazprom flows 40% of European supply and recently we see Gazprom shipping to Italy and without it they will choke this winter. We cannot underestimate the political field without taking into consideration how important Russian gas is to Europe’s survival.

Despite oil supply, I suppose this is going to have a tremendous economic impact on Europe which will be seen and felt in 2023 first and second quarter. It is a conundrum; Russia Ukraine/,America/China, Korea/ Japan and do we see the classic outbreak due to economic downturn, or do leaders believe their existence depends on economic prosperity. I suppose so as the worlds focus is on solving these vary issues however we have Putin who threatens nuclear attack on his so-called sovereign territory in the region of Crimea and annexed territory. If you think about it, we wouldn’t have anticipated Putin’s attack on Ukraine and we cannot anticipate his actions as he becomes desperate. He starts to remind us of non other than the two most disgusting Europeans leaders of the last century.

It is scary yet our focus is on the multitude of distractions as many middle class lean towards new right leadership and we hope people will not behave as they did in the early 1930s. They believed that Hitler would restore the country’s economy and status in the world and see it become once again a dominating force in Europe.

What’s next, as the pains grows and when the Fed says no more hikes do they reverse the effective damages sustained; I doubt it, even if there is a Stockmarket recovery. Can financial markets accept going back to the status quo without some kind of total re-set. If this is true, we need to see a year of 2023 with bankruptcies, and some kind of added pain at an extraordinary level. I think that’s the message from the Fed who are fed up with no pun intended the economic growth based on government over supplying money to stimulate the economy. The Covid false pretence we never really thought what would happen and consequently we have inflation.

It isn’t the rates alone it is the Covid hangover and the ridiculous costs of almost everything. The supply chain is still disrupted by a labor force that is undecided and the idea of recovery is something we all hope for but is this a snow ball racing down the hill. Once it starts it is difficult to stop, the momentum is tremendous and frightening.

God Save the Queen – seems too late worrying about the short term, yet still unable to determine the longterm. And, we need to start looking beyond the stock markets to have a better understanding of the prognosis. There is no safe haven, it is all a matter of putting globalisation to work and coming to terms with how humans are divided.