Seven Reasons Why We Should Not Depend on Imported Goods from China

It seems to me that the situation in China is far different from what most people think it is. Even if we would like to depend on China, we really cannot.

Reason 1. When we depend on goods from China, an amazingly large share of the world’s industrial activity gets concentrated in China.

The five largest users of energy in the world are China, the United States, India, Russia, and Japan. The International Energy Agency shows total energy consumption as follows for the year 2016:

Figure 1. IEA’s estimate of energy consumption (total fuel consumed, or TFC) by sector in 2016 for the top five energy consuming nations. Mtoe is million tons oil equivalent. Source: IEA. Non-energy use is the use of fossil fuels as a material to create end products that are not burned. Examples include medicines, plastics, fertilizers, asphalt, and fabrics.

When these countries are compared, restricting our analysis to the portion of energy used by industry, we find the rather disconcerting result shown in Figure 2:

Figure 2. Chart by the International Energy Agency showing total fuel consumed (TFC) by industry, for the top five fuel consuming nations of the world.

China consumes more fuel for industrial production than the next four countries listed (United States, India, Russia, and Japan) combined. Of course, we don’t know exactly the corresponding amounts for other countries of the world, but we can observe that if a country is concerned about its CO2 emissions, the easiest way to reduce these emissions is to send heavy industry elsewhere, such as to China or India. There are likely many countries that are primarily service economies, thanks to the option of outsourcing most industry to other countries.

Much of the discussion I have read regarding sending industry elsewhere has been in the direction of, “As advanced as our economy is, we don’t need heavy industry; service jobs will substitute. Industry can be developed at lower cost elsewhere. Everyone will be better off with this arrangement. The invisible hand will provide jobs and goods and services for everyone.” In addition, corporations saw the possibility of adding customers from around the world. Not too many thought about the real-world problems that might result.

Clearly there is a problem with the jobs being lost to China and other Emerging Markets. When new service jobs are added, they often do not pay as well the industrial jobs they replaced. In fact, there might not be enough jobs in total, if automation plays an important role as well.

Another issue is that the level of industrial concentration can be a problem. We are now depending on China and perhaps a few other countries to provide for a large share of the “stuff” we use. Even if China is not the only provider, it is often an important part of the supply chain. If something should go wrong (for example, widespread riots in China), we don’t have a Plan B.

Reason 2. China needs energy products to make the goods it uses for itself and for the goods it exports. China’s own energy supply is faltering. Because of China’s huge size, it is becoming increasingly difficult to keep China’s energy consumption rising sufficiently rapidly using imported energy.

China’s own energy production is shown in Figure 3. (Note: Hot off the press! New BP report released this week.)

Figure 3. China energy production by fuel, based on 2019 BP Statistical Review of World Energy data. “Other Ren” stands for “Renewables other than hydroelectric.” This category includes wind, solar, and other miscellaneous types, such as sawdust burned for electricity.

It is easy to see that China’s coal production hit its highest point in 2013 and has stayed at a lower level since that date. Also, China’s highest oil production occurred in 2015, with lower production since that date. China’s total energy production has been rising recently, but only with great effort. Total energy production is only 8.9% higher in 2018 than it was in 2012, implying an increase of less than 1.5% per year, relative to 2012 amounts.

A standard workaround for inadequate energy production growth is imported energy products. Even with these imports, it has been impossible to keep total energy consumption rising as rapidly as it rose in the 2002 to 2007 period. The cost with imports is greater, also.

Figure 4. China energy production by fuel, plus line showing its total energy consumption (including imports), based on BP 2019 Statistical Review of World Energy data.

In 2018, China imported 71% of its petroleum (either as crude or as products), and 43% of its natural gas. It was the largest importer in the world with respect to both of these fuels.

In 2018, China’s coal imports shrank as its own coal production surged. This was almost certainly a change planned by China. China would much prefer producing its own coal (and keeping the jobs within the country) to importing coal from elsewhere. China imported 4% of its coal from elsewhere in 2018.

Reason 3. The commodity demand from China is so huge that, to a significant extent, it determines world commodity price levels. Where regional energy prices exist, China’s choice regarding whether or not to import from a country can influence local price levels.

Chile is the largest copper producer in the world. A recent article regarding problems associated with lower copper prices notes that the demand for Chilean copper has been driven “almost entirely by the expanding Chinese economy over the last three decades.” For many commodities, China consumes over half of the world’s commodity supply. If China’s industrial demand is growing, prices will tend to rise, allowing more of the mineral to be extracted. Higher commodity prices tend to be needed over time because the ores of highest concentration (and otherwise easiest to extract ores) tend to be extracted first. Ores extracted later tend to be more expensive to extract, so higher prices are required for extraction to be profitable.

This situation of China playing an extremely large role in commodity prices holds for a very large number of commodities. If China is building widgets or any other product, using a particular commodity, China’s need to buy this commodity in the world market will tend to hold up world prices for the commodity. This situation holds even for fossil fuel prices.

Reason 4. Over the next few years, China’s coal supply is likely to fall significantly because of depletion. This lower fuel supply is likely to lead to a shrinkage of China’s industrial capability, and, indirectly, falling world commodity prices of all kinds.

The problem that China is encountering in Figure 3 is “peak coal.” This is a similar problem to that encountered by the United Kingdom immediately before World War I, and to that Germany encountered just before World War II.

Figure 5. The timing of the peaks is peculiar, relative to wars.

Coal tends to be the industrial fuel of choice because it is cheap. Goods made with coal tend to be inexpensive, especially if wages paid to workers are low and if the company making the goods does not spend much money on pollution prevention. Hydroelectric can be an adequate substitute for coal, if the water flow can be depended upon. Wind and solar are too intermittent and not sufficiently inexpensive to be adequate substitutes for coal. Wind and solar (included in “Other Ren” on Figure 3) are also far smaller in quantity than coal.

Outsourcing a large share of the world’s manufacturing to China seemed like a great idea back when it was started, often in the early 2000s. If, at some point, China cannot really handle the responsibility it has taken on, outsourcing gets to be a huge problem.

The reason why coal prices cannot rise very high is because if they do, the prices of finished goods will need to rise as well. Wages of workers around the world will not rise at the same time because the higher cost of production takes place due to something that is equivalent to “growing inefficiency.” The coal mined is of lower quality, or in thinner seams, or needs to be transported further. This means that more workers and more fuel is needed for each ton of coal extracted. This leaves fewer workers and less fuel for other industrial tasks, so that, in total, the economy can manufacture fewer goods and services. Because of these issues, countries experiencing peak coal are pushed toward contraction of their economies.

Unfortunately, rather than leading to high prices (to compensate for the higher extraction costs), running short of inexpensive-to-extract fuel tends to lead to war, or to tariff fights. Countries whose coal is depleting will try to maintain their own supply as long as possible. They will invent excuses to stop importing coal. Back in September 2018, the Financial Review reported, “China has introduced unofficial restrictions on coal imports in a bid to prop up domestic prices by slowing down customs approvals at key ports.” China needed higher internal prices to make it profitable to extract coal from its depleting coal mines.

Figure 6. Chart showing prices of Brent Oil, China Qinhuangdao Spot Coal price, and Asian Marker Coal, all in US$ of the day. Amounts from BP 2019 Statistical Review of World Energy. Note also that the units of coal (ton) are much larger than the units of oil (barrel) used on this chart. Thus, the same number of dollars of buys a much larger quantity of coal than of oil; coal is cheaper.

If higher coal prices really were possible over the long term, it would make it possible to open new mines in more distant locations. The location of coal mines is important because transport costs by rail or truck tend to be high. China built the large ghost city of Ordos, Inner Mongolia, on the expectation that coal prices would rise, making development of coal in the area profitable. Unfortunately, coal prices fell, making the project not economic. I visited the area in 2015, after teaching a short course on Energy Economics in Beijing. There was a large almost empty airport, and few vehicles were using nearby multi-lane roads.

Reason 5. All of the concern about future tariffs artificially raised China’s 2018 industrial production and commodity prices. Because production was brought forward into 2018, China’s production and world commodity prices can be expected to be lower in 2019 and in future years.

Manufacturers wanted to front-run tariffs, so they tended to ramp up production in advance of the tariff implementation date. This higher production in turn tended to raise commodity production and prices around the world. Note on Figure 6, above, that coal and oil prices are both higher in 2018 than in 2017. Prices in 2019, not shown, are tending to trend downward again.

China badly needed higher coal prices in order to help its coal extraction. Thus, part of the reason that China was able to continue to function as well as it did in 2018 was because of all of the discussion about future tariffs. If this discussion had not taken place, employment in China would likely have been lower. With this lower employment, sales of automobiles and smartphones would have been lower as well.

Note, too, that even with the demand brought forward into 2018, China’s economy was not functioning very well in 2018. Private passenger automobile sales for the year fell by 4%. Smartphone sales fell by a worrisome 15.5%. Clearly, workers were having difficulty buying the kinds of goods a person would expect a growing economy to be selling. I would attribute these problems to the peak coal problem mentioned earlier, making it increasingly difficult to increase the amount of industrial operations provided by China’s economy.

Reason 6. The Chinese economy has been gradually changing and adapting to hide its energy problems. Even more changes will be needed in the future, potentially affecting the world economy, with or without tariffs.

The Chinese economy reports carefully massaged GDP numbers, which many analysts consider to be inflated in recent years. Its debt level keeps rising to try to keep all of its operations going.

We know that China discontinued one major industry at the beginning of 2018: recycling plastic and other types of low-valued recycling. With low oil and natural gas prices, this type of recycling cannot be profitable. Of course, discontinuing a major industry can be expected to lead to a loss of jobs within China. But, on the positive side, it frees up coal and other energy resources in China for other industries that can (perhaps) make more profitable use of them.

On a world basis, the loss of the plastic recycling industry becomes a problem. If rich countries are willing to subsidize the cost of sending plastic recycling to China, this subsidy allows containers that bring goods to rich countries to be sent back to China with a paid load inside. Thus, operating the plastic recycling industry helps keep the cost of shipment of goods from China to the US or Europe down because the shipping costs only need to cover the one-way cost of transit, rather than also covering the cost of shipping the empty container back. Without the subsidy to pay the freight of the plastic recycling, costs for the shipping industry rise, making international trade more expensive. Eliminating the subsidy that rich countries are paying to ship otherwise-empty containers back full of mixed trash is part of what pushes the world economy to contraction.

Other countries are not taking over very much of China’s role in recycling plastic, either. The net effect is that the loss of recycling is one of the things pushing the world toward contraction.

China has no doubt been cutting back in other ways as well. It is likely that it is not building as many uninhabited cities and roads that are really not needed. Ugo Bardi recently posted this chart showing global cement production.

Figure 7. World Cement Production by Ugo Bardi from a blog post on January 19, 2019.

China produces over half of the world’s cement; part of the reduction we are seeing relates to China’s falling use of concrete in new buildings and roads.

In some cases, China is moving in the direction of being a service economy. A recent video states that of the $237.45 cost of producing an iPhone in China, Chinese workers only provide assembly services, worth $8.46. The US contributes $68.69 of the cost, mostly in the design and distribution phases. The parts are generally outsourced from other parts of the world.

One way of looking at what is happening in China’s economy is to analyze the country’s oil consumption in terms of the relative amounts of diesel (used primarily by industry) and gasoline (often used by private passenger vehicles).

Figure 8. Gasoline and diesel consumption for China, based on data from 2019 BP Statistical Review of World Energy.

Based on Figure 8, it appears that China’s industrial growth suddenly leveled off about 2012. This, not by coincidence, is about the time that China’s coal problems were becoming apparent in China. China’s gasoline consumption has continued to rise, however. It appears that once it became apparent that its coal supplies were starting to seriously deplete, China began to “grow” China’s economy more as a service economy. After 2012, most growth seems to have come in the non-industrial sectors of China.

Reason 7. A major concern should be a financial collapse, far worse than 2008, both in China and for the world as a whole.

The world needs growing energy supply to support the world economy. China is increasingly having difficulty with its energy supply. When China has trouble with its energy supplies, the world as a whole has a problem with its growth in energy supplies.

A few months ago, I showed the role China has played in the world economy is this chart:

Figure 9. Ten year growth in world energy consumption, divided between the blue portion associated with rising population, and the red portion associated with higher energy consumption per capita, which I have called “Living Std.”, meaning “Higher Living Standards.”

China added a little bump in GDP growth at the end of the nearly 200-year time period shown, after it joined the World Trade Association in December 2001. The energy added by China (mostly in the form of coal) allowed the world economy to continue to grow, when it otherwise would have been up against limits.

Now we are reaching a situation where China’s energy production is likely to flatten or fall because of the depleted state of its coal mines, and the fact that coal prices can’t rise high enough, for long enough, to open new mines. The world economy, over the period shown, has always had rising energy consumption. In most cases, energy consumption rose faster than population growth, allowing some growth in the standard of living over time.

Changing to a situation of shrinking energy consumption per capita would likely be extraordinarily traumatic. Population would likely fall. Commodity prices would drop to low levels. Debt would tend to default; prices of shares of stock would fall. Many governments would fail. If shrinking energy consumption per capita starts in one country (whether China or elsewhere), it could easily spread to other countries around the world.

We don’t know what is ahead, but we know that the low points on Figure 9 were very bad times, even though energy consumption in total was not contracting. The decade of 1860 to 1870 was the decade of the US Civil War. The decade of the 1930s was the decade of the Great Depression. The decade of the 1990s was the decade of the collapse of the central government of the Soviet Union.

We also know that world energy consumption and GDP growth tend to be highly correlated.

Figure 10. World GDP Growth versus Energy Consumption Growth, based on data of 2018 BP Statistical Review of World Energy and GDP data in 2010$ amounts, from the World Bank.

This is as we would expect, because energy consumption is required for the many aspects of GDP growth. Transportation, heating and/or cooling, and electricity all require energy consumption, for example.

The recent divergence between GDP and energy consumption on Figure 10 may be the result of overstated GDP amounts by China, India, and other countries. If a country wants to appear inviting for new investment, there is a temptation to overstate GDP since other countries seem to be doing so, without penalty.

Back during the Great Recession of 2008-2009, our problem was with homeowners who took out loans that were far higher than they could really afford. Today, we have whole economies taking on more debt than properly stated GDP reports would suggest they are able to handle. We go from one version of optimism regarding debt levels to another.

Conclusion. If a person doesn’t understand how badly the energy situation is working out for China, or how important energy consumption is, it is easy to think that the problems China is facing are primarily tariff-related. In fact, China’s situation is a very worrisome one, with or without tariffs being added.

To fix the situation, China would need a very cheap, non-intermittent, locally produced, non-polluting additional energy source. This energy source would also need to be rapidly scalable. Such an energy resource doesn’t appear to be available.







About Gail Tverberg

My name is Gail Tverberg. I am an actuary interested in finite world issues - oil depletion, natural gas depletion, water shortages, and climate change. Oil limits look very different from what most expect, with high prices leading to recession, and low prices leading to financial problems for oil producers and for oil exporting countries. We are really dealing with a physics problem that affects many parts of the economy at once, including wages and the financial system. I try to look at the overall problem.
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890 Responses to Seven Reasons Why We Should Not Depend on Imported Goods from China

  1. Harry McGibbs says:

    “Bleak’ market signs for global economy, warns ECB hopeful. A leading contender to head the European Central Bank has warned of “bleak” indications about the health of the global economy and said a breakdown in co-operation was paralysing officials’ ability to fight the next crisis.”

    • Harry McGibbs says:

      “British companies look set to cut their investment by the most in 10 years in 2019 as the Brexit crisis drags on, weighing on future economic growth prospects, a survey showed on Monday.”

    • Xabier says:

      Except, of course, what this chap would call a ‘healthy’ economy is -a la Catch 22 – a globally-destructive, waste-creating one.

      If it ails and dies, so do we.

      If it thrives, we also die – poisoned.

      Damn, I never volunteered for this doomed mission on planet Earth…… 🙂

      • Niko B says:

        For many days we travelled from a distant place and time,
        To reach a place they call the planet earth,
        There was to be a celebration,
        On the mission of the sacred heart.

        The planet earth from way up there is beautiful and blue
        And floating softly through a rainbow,
        But when you touch down things look different here,
        At the mission of the sacred heart.

        Watching all the days roll by
        Who are you and who am i?

        On a dirty worn-out sidewalk, sits a mother with a baby,
        In her vale of tears she sees no rainbow
        And someone’s singing from a window
        In the mission of the sacred heart.

        Chorus — repeat

        There’s a building on a corner, in a city, in a land,
        On a place they call the planet earth,
        My orders are to sit here and watch the world go by,
        From the mission of the sacred heart.

        Chorus — repeat

        Electric Light Orchestra – Mission Lyrics

        • Tsubion says:

          If you rise up just a little bit… you don’t see ANY activity on the planet.

          An observer would see that earth has water at a certain distance but that’s it.

          The same as when you look at a tenis ball you just see a ball.

          You don’t see the billions of bacteria crawling over its surface going about their business.

          The bacteria, of course, from their perspective, think they are the most important thing in the universe and pontificate to each other about collapse and other fads.

  2. Harry McGibbs says:

    “Chinese leaders argue their citizens can outlast Americans in a trade war because they can endure hardship better. But, as China’s economic slowdown deepens, there’s a growing sense of restlessness. Not only does the next rung of the ladder look increasingly out of reach for many Chinese, they’re starting to question whether government decrees can fix the situation.”

    • Harry McGibbs says:

      “Rabobank estimate China’s pork production may fall by a third as a result of African swine fever. If correct, that would be a major impact on the global food supply chain.”

    • Xabier says:

      When Russians were faced by the onslaught of the Germans in WW2, they stuck with it because 1/ there was no alternative, it was a life or death struggle; and 2/ they still believed fervently in the ideals of the Revolution.

      Whereas the Chinese are no longer motivated by any ideal,as far as I can see, except personal enrichment, have never, ever had it so good, and now expect the government to ensure it for them.

      The government telling the Chinese people: ‘You can take, you’re made of steel!’ is s bit rich.

      It will be fascinating to see how this plays out, as far as we are allowed to know.

      • Yorchichan says:

        Stalin’s Order No. 270 published on August 16, 1941. This order stated in regard to captured Soviet POWs:

        If…instead of organizing resistance to the enemy, some Red Army men prefer to surrender, they shall be destroyed by all possible means, both ground-based and from the air, whereas the families of the Red Army men who have been taken prisoner shall be deprived of the state allowance and relief.

        The commanders and political officers…“who surrender to the enemy shall be considered malicious deserters, whose families are liable to be arrested [the same] as the families of deserters who have violated the oath and betrayed their Motherland.”

        So, for a Soviet soldier, surrendering to the Germans meant almost certain death for oneself and ones family. Retreating without orders would likely result in instant summary execution. I expect these facts were at least as motivating as fervent belief in the ideals of the Revolution.

        • Chrome Mags says:

          By decreeing not one step back and enforcing it, essentially turned millions of soldiers into army ants. Later of course it was sentimentally referred to as the great patriotic war.

          • Xabier says:

            All very true. But they did actually have an ideal they believed in, and fear alone does not, never has, make men and women fight and make sacrifices.

            It’s worth reading their memoirs, the real ones.

            On the other hand, the more advanced tribal peoples – Alans, Huns, Turks, Visigoths, etc, generally fought for wealth, fame and the sheer love of war and violence – no higher ideals there.

  3. MG says:

    Just happened in my surroundings: the employee shot dead his foreman into forehead and himself in an engineering company in Dubnica, western Slovakia.

    He went directly to the meeting of the managers where he commited the murder:

    The preceding hot weather, drugs etc. could play the role, too.

    • MG says:

      This former employee has been fired from the given company and the given foreman contributed to his dismissal as the employee was not reliable and the drugs also played a role in his case.

      We live in more and more dangerous times…

    • SuperTramp says:

      MG, this is common here in the United States. Tired of watching the nightly news and hearing another work or school related shooting.
      The sad part, many are committed by young adults for seemingly no reason other than being alienated from family or their peers.
      Unfortunately, this may be a world-wide trend.
      I can post examples but……here in South Florida we are still getting over this tragic event

      Roughly a year before the massacre at Marjory Stoneman Douglas High in Parkland, school officials were warned by a student that Nikolas Cruz had mused about shooting up the school, according to a young woman’s sworn statement to police, which was released Friday.
      As a result of that warning, she said in her statement, Cruz was “expelled” from the student body.
      If true, it would add to a list of what critics have called a series of warning signs missed or downplayed by the Broward school district, law officers and mental health professionals, all of whom had troubling encounters with the Parkland teenager.

      P.S. On the school property that day a Broward County Sheriff was on duty and the head of the Active Shooter program, but did nothing during the shooting.

      The Broward Sheriff’s Office has also fired Peterson for neglecting his duties at the high school on the day of the shooting after an internal investigation.The Broward County Sheriff’s Deputy who fled at Marjory Stoneman Douglas High School when a mass shooting broke out has been arrested for failing to do his job and help limit the carnage … and he’s facing up to 96 years in prison.
      Scot Peterson has been arrested and charged in Florida and has been hit with 11 criminal charges stemming from the Parkland shooting on February 14, 2018. from TMZ

      • MG says:

        There is a growing number of the people who become alone or alienated from their family. The quest for higher and higher expectations in work and lower and lower wages squeezes them out from the society.

        Who talks about the truth about the implosion that is going on?

        • MG says:

          His story is quite interesting, here from google translate, slightly corrected:

          The shooter Martin P. grew up at the Dubnica housing estate Centrum 1. He only lived with his mother, he didn’t know his father. “He was always weird. She even beat her mother so much that one day she left the apartment and moved to her father, whom she was looking after. But she returned to Martin every day, she was cleaning, washing, cooking. Whatever it was, he was her son, “the neighbor sighed.

          Martin’s mom died three years ago, he stayed in the apartment himself. According to the people, his oddness has deepened. “He took drugs, first marijuana, then others, also pervitin, and he was fired from work, he had debts. He used to have the cars, then got rid of them, always using a bike. Occasionally he walked alone on the street and laughed, I had chills out of it. On Monday morning I saw him sitting on his bike, wearing overalls, putting his hood on his head, always walking around, lighting a cigarette and kicking off. I had no idea that he was going to murder when the cops came in and took his apartment. They were looking for weapons. He was supposed to have three, two of them he took with him, ”she said. Some time Martin worked abroad, but he always came back. “Had he not taken drugs, he would have been handy, had a good knowledge of electrical installations, but he became spoiled,” the neighbor closed”

        • TIm Groves says:

          On the other hand, what is Czech Republic homicide rate?

          According to this source it is down to 0.6 per 100,000, just a third of what it was 20 years ago.

          For comparison, the US homicide rate is 5.3 per 100,000, the Russian rate is 4.9, many Caribbean and Central American countries have homicide rates that are ten times the US rate, and some US cities are up there with them.

      • Chrome Mags says:

        This is why I don’t watch local news. I also don’t watch national news for all together different reasons.

    • I am sure that news stories of what others had done played a role as well.

  4. SuperTramp says:

    Well now, if this isn’t a message to all of us relying on SA to provide BAU Oil to fuel our cushy lives!

    The privatisation drive is part of Vision 2030, a package of reforms led by Crown Prince Mohammed bin Salman that is intended to wean the economy off oil and create jobs for young Saudis.

    HA,ha,ha….wean off oil… that’s funny…create jobs for young Saudis…that’s even funnier…young Saudis have no interest in working….

    It gets better….The government’s aim to attract investment into everything from education to sports, a cornerstone of its effort to trim dependence on oil revenues, has been mired by some holdups and fallout from the murder of journalist Jamal Khashoggi.

    Sure, they will….seems the giant elephant oil field is in terminal decline and the handwriting is on the wall.
    Maybe, they can invest in solar power and export the energy via Satellites?!

    The end of the Oil Age should provide a lot of comedy shows. Humans have a lovely imagination that entertains to no end.

  5. SUPERTRAMP says:

    Setting ALL kinds of records…..
    633 divers collect over 1,500 pounds of trash at a Florida beach — and set a world record
    The Guinness World Record-setting 633 divers retrieved at least 1,626 pounds of trash and 60 pounds of fishing line at the Deerfield Beach International Fishing Pier in Florida.
    The official weight of the trash recovered is still being tallied, and the number is likely to grow, said Tyler Bourgoine, who participated in and helped organize the cleanup. Ocean conservation group Project AWARE estimates that the cleanup might have removed as much as 3,200 pounds of marine debris
    Plastic and other human-produced waste have become a growing presence and problem in the oceans. About 8 million metric tons of plastic enter the ocean annually — equivalent to the weight of nearly 90 aircraft carriers, according to the National Oceanic and Atmospheric Administration (NOAA).
    When I walk my little chiwawa/terrier, Cricket, I bring along an empty bag to collect trash thrown along the side of the street….mostly empty plastic water bottles. The bottlers call it “Blue Gold”,
    Must be a high profit product..sarcasm.

  6. theedrich says:

    With all of the hysteria whipped up by the DeepState and Fake News media about how Satanic President Trump is, the elephants (plural) in the room go completely unnoticed, in particular the growing drug cancer. On Tuesday, 2019 Jun 11, C-SPAN ( recorded a Senate Hearing on Combating Drug Trafficking. A few points made during the discussion about this existential crisis:
    Illicit drug trade in U.S.: profits $426 to $652 billion/yr
    Distribution: global and growing
    Adapts to market changes
    Deaths due to drugs (2017):
    California, 5,000;
    Texas, ~3,000, about half from synthetic opioids;
    U.S.: approaching 70,000 – 174 every day;
    globally (2015, latest): 450,000;
    # people murdered in Mexico since 2006 in connection with the drug trade: 150,000.
    In 2018, in Mexico, an estimated ⅓ to ½ of 33,000 murders committed were drug-trafficking related, with only 21% of the cases having gone to trial.
    In 2018, National Drug Assessment: drug poisoning = leading cause of death and injury in the U.S.
    (outnumbers deaths from firearms, motor vehicles, suicide and homicide).
    # of major source or transit countries: 22, primarily in Central and South America, as well as Asia
    Domestic and transnational cartels operating in Mexico and Texas: Sinaloa; Jalisco New Generation; Gulf; Los Zetas; many others
    In the last few years, fentanyl has “skyrocketed” in prominence
    In 2018, more than 133,000 pounds of heroin, cocaine, meth and fentanyl, were seized in the U.S.
    (To date in 2019, nearly 101,000 pounds of these substances have already been seized, and we’re just halfway through the year.)
    The cartels traffic in: cocaine, heroin, fentanyl and other illegal drugs; migrants; humans for sex slavery; money laundering; counterfeit goods; etc.
    World’s largest supplier of illicit opium: Afghanistan. (Mission accomplished — after 17 years of war?)
    Migration and drug trafficking may arguably be separate issues, but when Border Patrol has been overwhelmed by this mass influx of humanity swarming into entry points, Customs and Border Protection officers have to be assigned different duties to take care of children and families; consequently, the drug cartels exploit that chaos and uncertainty to move more of their poison into the U.S. It is, thus, impossible to separate migration from drug trafficking entirely.

    Note that the “Beto” (true name: Robert Francis) O’Rourke, darling of the Leftist media, ridicules the War on Drugs and says it should be eliminated.
    And the Democratic Party, holding the House of Representatives hostage, refuses to pass laws to stop the invasion coming through the southern border. It wants more outhouse parasites imported so that the Democratic Party will be the only political party in the U.S.

    Yet the DeepState and media are more interested in pursuing foreign wars than in saving the lives of Americans at home.

    Also of note: According to 𝕿𝖍𝖊 𝕹𝖊𝖜 𝖄𝖔𝖗𝖐 𝕿𝖎𝖒𝖊𝖘, the Pentagon, through its Cyber Command, is now using cyber “implants” to attack Russia’s power grid ( (Of course, if Russia did the same to the U.S., it would be declared an act of war. See The paper also says that the Pentagonians have refrained from telling Trump about what they are doing for fear that the President might leak the information to Russia. So now we know that the “heroic” military has its own foreign policy, which supersedes that of the U.S. True democracy.

  7. Dennis L. says:

    I came across a book by Ahrens, Sönke regarding note taking entitled “How to Take Smart Notes.” For those of us who read widely and attempt avoiding confirmational bias it is an interesting system and the “slip box” system might be worth a try; Luhmann’s ideas on which it is based seem to be a very interesting. He wrote on a wide range of subjects but mostly human society if I understand the ideas at this point.
    The idea of confirmational bias seems to be a serious issue in many areas of American and world debate, avoiding it is a challenge. In our world of “oil” it was evident at the ASPO meetings and in retrospect Gail avoided this problem.
    Were any readers in Lisbon? That was a wonderful meeting in a facility which was in large part due to the efforts of Calouste Gulbinkian known as Mr. 5%. Some of you may find his life interesting, one smart cookie.

    Dennis L.

    • Davidin100millionbilliontrillionzillionyears says:

      “The idea of confirmational bias seems to be a serious issue in many areas of American and world debate, avoiding it is a challenge.”

      I see confirmation bias everywhere I go… 😉

      anyone else?

      • If a group needs to sell its product, or even to get donations, it has to tell a consistent story that readers want to read. It is very difficult to get an unbiased look at what is happening.

  8. Harry McGibbs says:

    “Inflation expectations for the eurozone have plunged to a record low. Investors and traders are worried its economy is slipping into “Japanification”, an inescapable period of stagnant growth and ultra-low interest rates.

    “The decline in a closely-watched inflation gauge – the five-year forward rate – has accelerated as global growth stutters, tumbling to an all-time low of just above 1.10pc yesterday.

    “The drop indicates investors believe the European Central Bank (ECB) might be incapable of stopping the region sliding into deflation if the world economy suffers a downturn…

    “Interest rate swaps indicate investors are starting to brace for the ECB to cut rates deeper into negative territory. However, Bank of America Merrill Lynch has warned further cuts risk the eurozone reaching the so-called “reversal rate” – the point at which ultraloose monetary policy “reverses and becomes contractionary for lending”.

    “”The ECB does not have many bullets left when it comes to cuts and it certainly has fewer than other central banks,” it said.”

    • Harry McGibbs says:

      “We are faced with a pile of s***,” an activist investor said during the nine-hour event, while another shouted: “If even Pope Benedict XVI can resign, why not [Deutsche Bank chairman] Paul Achleitner?”

      “It is no surprise that investors are angry (tempers were described as “boiling over” in the Frankfurt concert hall where the annual meeting was held). Once a symbol of German economic might, Deutsche’s downfall has been dramatic…”

      • If I recall it correctly this DeutscheBank story has been chiefly about one particular faction of euro capital trying to enter the big boys scene and duke it out on the highest parlors of global terra/giga finance. And they lost bigly.. you can’t compete with accumulated pirate wisdom of centuries of the anglos and other old factions there, what a predictable outcome.. Too bad someone had to pay for it, the skimmed value has been already redistributed not only from Germans but their vast colonies in the wider EU realm as well.

    • Harry McGibbs says:

      “At a time of rising U.S.-China trade tensions and a marked slowdown in the European economy, the last thing that the world economy now needs is a deepening in the U.K.’s Brexit crisis. Yet, it is difficult to see how the U.K. economic and political situation will not worsen meaningfully as the world’s fifth-largest economy approaches its Oct. 31 Brexit deadline.”

  9. Harry McGibbs says:

    “Fears over economic growth are spreading, and investors are pricing in the Federal Reserve cutting interest rates three times this year, beginning next month. And yet, various measures of market volatility are surprisingly subdued…

    “It is not just a vague sense of unease that is increasing. The global version of Citi’s Economic Surprise index — which reflects how data comes in, compared with expectations — is locked in its longest run in negative territory on record. In other words, economic data has been disappointing for an unnervingly long stretch.”

  10. Harry McGibbs says:

    “The global slowdown will extend into next year as mounting trade war uncertainty forces businesses to rein in spending and Chinese consumers turn cautious, Fitch Ratings has warned.”

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