Green Energy Delusions
- MSM second-guesses the sustainability of, er, “eco-sustainability”
- Apple unveils its latest geeky gadget (that no one really asked for)
- JPM finally admits to an imminent “very big liquidity drain”
- Scotland’s “ferry fiasco” strands thousands
- Careful what you wish for: A Social Security “con-con”
Our Glorious Green Future — Oh, Never Mind
We return to an occasional theme of ours this year — “peak green” or, alternatively, second thoughts within the power elite about climate-change hysteria.
We first spotted it in January, when the head of the National Transportation Safety Board fretted about how the batteries that add weight to electric vehicles might lead to “unintended consequences” in the form of more severe crashes.
Then in April, Paradigm’s Jim Rickards took note when the Biden administration approved an $8 billion oil-and-gas drilling project on Alaska’s North Slope… and began auctioning off more than 73 million acres in the Gulf of Mexico for offshore drilling.
Yesterday, without even trying, I stumbled across two mainstream media stories throwing cold water on the “miracle” of green energy.
Dead and dying solar panels will be “a waste mountain by 2050, unless we get recycling chains going now,” warns Ute Collier of the International Renewable Energy Agency.
The typical solar panel has a lifespan of about 25 years. Meanwhile, the globe’s solar-generation capacity grew 22% in 2021.
"By 2030,” Collier tells the BBC, “we think we're going to have 4 million tonnes [of scrap] - which is still manageable - but by 2050, we could end up with more than 200 million tonnes globally."
The BBC article spotlights a factory in France that will open later this month — the world’s first dedicated to recycling solar panels.
“The technology is expensive,” the article acknowledges. “In Europe, importers or producers of solar panels are responsible for disposing of them when they become expendable. And many favor crushing or shredding the waste - which is far cheaper.”
But not exactly “green” when you consider all the glass, aluminum, silicon, silver and copper going into the landfill.
Also not very green — the process of extracting the nickel needed for electric vehicle batteries.
The Wall Street Journal had a looong front-page story about it yesterday. “The process of getting the mineral out of the ground and turning it into battery-ready substances,” it said, “is particularly environmentally unfriendly.
“Reaching the nickel means cutting down swaths of rainforest. Refining it is a carbon-intensive process that involves extreme heat and high pressure, producing waste slurry that’s hard to dispose of.”
Aside from that, it’s as green as grass!
The article bends over backward to try to say that “electric vehicles are designed to be less damaging to the environment in the long term than conventional cars.”
But at the same time it doesn’t say a word about how — like solar panels — EV batteries have a service life, at the end of which there’s no economically feasible recycling process.
➢ Flashback: In 2021, Joe Biden’s “climate czar” John Kerry said, “I am told by scientists that 50% of the reductions we have to make to get to net zero [carbon emissions] are going to come from technologies that we don’t yet have.”
Meanwhile, a once-powerful enforcement weapon in the hands of the greenies is steadily being rendered harmless.
This development was spotted by Jim Rickards, and it requires some background: “One of the most powerful institutions created to promote the climate scam,” he tells us, “is called the Glasgow Financial Alliance for Net Zero (GFANZ), led by known climate propagandists like Michael Bloomberg, Mark Carney (head of three central banks) and Mary Schapiro (a reliable Bloomberg apparatchik and former head of the SEC, CFTC and Finra).
“GFANZ is designed to force the financial industry to push the climate alarm agenda by defunding energy companies and promoting Green New Scam technologies. GFANZ operates through so-called ‘alliances’ that target specific industries.
“One such alliance is the Net-Zero Insurance Alliance (NZIA), designed to force insurance companies to deny insurance to oil and natural gas companies among others.”
OK, with all that windup out of the way, here’s the new development: “The insurance company members of NZIA are running for the exits,” says Jim.
“Seven members of NZIA have quit the alliance in recent months, including five of the eight founding signatories and the alliance chair. Companies quitting the NZIA include giants such as AXA, Alliance and SCOR.
“The reasons for quitting were mainly political. U.S. state attorneys general from 23 states have warned the NZIA members that their activities may violate federal and state antitrust laws.
“If the attorneys general moved forward with those cases, it could result in billions of dollars in damages against the NZIA members and possible breakup of the companies. Shareholder lawsuits for damages against the company directors would not be far behind.”
Bottom line: Fossil fuel producers can rest easier if they can get the insurance they need to operate. One more signpost on the road back to sanity?
➢ Editor’s note: Today and tomorrow only, you have the chance to secure membership in Jim Rickards’ most successful trading advisory — at an exceptional discount. Follow this link for details direct from our customer care team.
Today’s Markets: Bubbling Beneath the Surface
It’s a quiet day in the markets… but there’s a lot that’s bubbling beneath the surface.
The major U.S. stock indexes are all in the green, but not by much. The S&P 500 is up a quarter percent at 4,284. Gold has eased off to $1,958 and silver to $23.39. Crude is holding on to yesterday’s post-OPEC gains at $72.13.
Apple’s share price has shed nearly 4% since midday yesterday — when the company rolled out its $3,499 Vision Pro “mixed reality” headset.
The Financial Times calls it “Apple’s most significant product launch since Steve Jobs unveiled the iPad in 2010.”
The Stealth Optional website calls it a product “for rich dorks,” and that seems fairly representative of the treatment it’s getting in the techie press. “There are a few issues with the iPhone maker’s new tech, the biggest of which being that nobody wants it.”
She’s supposed to look relaxed, so why do I feel apprehensive looking at this Apple publicity photo?
“Apple has historically refined products with markets that were already well established,” points out Paradigm’s Ray Blanco.
The iPhone, after all, came on the heels of earlier smartphones like the BlackBerry and the Palm Treo.
In contrast, “The demand for virtual reality has been in a deep slump,” says Ray, “and mixed/augmented reality is largely untested. We have never seen how Apple operates as a trailblazer, so the whole tech world (as well as the markets) will certainly be watching carefully.”
Crypto is holding up nicely amid the (totally expected) SEC lawsuit against Coinbase, filed this morning.
The suit alleges that Coinbase traded at least 13 crypto assets that the SEC considers “securities” and thus under the SEC’s purview.
Coinbase has none of the stench that lingers over so many crypto exchanges — which might be why the notoriously anti-crypto SEC chief Gary Gensler is so keen to manufacture a case against it. (For some perspective and background, here’s a short write-up we did in March.)
Still, Bitcoin is hanging tough, a little below $26,000… while Ethereum rests at $1,839. Coinbase shares, on the other hand, have been clobbered 14% on the day.
With a week to go before the Federal Reserve’s next policy-setting meeting, mainstream finance titan Mohamed El-Erian says the Fed has squandered what little credibility it still has.
As we chronicled last week, the Fed is signaling it will leave short-term interest rates alone this time — while leaving the door open to another increase later in the summer. But that signal came before a hotter-than-expected jobs number last Friday.
“People are now going to be scratching their head,” El-Erian tells Bloomberg TV. “Why did they guide the market so strongly toward a skip ahead of this [unemployment] report and ahead of the next CPI [inflation number]?”
El-Erian, the chief economic adviser at Allianz SE these days, has not been kind to the Fed’s pandemic-era policies. Remember the Fed’s insistence throughout 2021 that inflation would prove to be “transitory”? El-Erian said last year that was “the worst inflation call in the history of the Federal Reserve.”
De-globalization signpost: The Silicon Valley venture capital outfit Sequoia Capital plans to separate its China and U.S. businesses.
Sequoia, renowned for its investments in startups such as TikTok — umm, also the defunct crypto exchange FTX — plans to split into three independent firms in the U.S., China and India over the next nine months.
“The split takes place as the firm has come under increasing pressure from officials in Washington over its China business,” says The Wall Street Journal.
New supply-chain snag? The National Retail Federation is urging the White House to intervene in a labor dispute that’s shut down the Port of Oakland as well as the biggest terminal at the Port of Long Beach.
More than 22,000 West Coast dockworkers have been working without a contract for nearly a year.
“We urge the (Biden) administration to mediate to ensure the parties quickly finalize a new contract without additional disruptions,” says the NRF’s David French, already nervous about getting back-to-school supplies to the stores.
When Liquidity Dries Up
You heard it here first: “Trillion-Dollar Treasury Vacuum Coming for Wall Street Rally,” warns a Bloomberg article.
“With a debt ceiling deal freshly signed into law Saturday by President Joe Biden,” it says, “the U.S. Treasury is about to unleash a tsunami of new bonds to quickly refill its coffers.
“This will be yet another drain on dwindling liquidity as bank deposits are raided to pay for it — and Wall Street is warning that markets aren’t ready.”
This is exactly what Paradigm’s own Dan Amoss warned about in our 5 Bullets last Thursday.
Now the analysts at JPMorgan Chase have put some numbers on the phenomenon: Liquidity by one broad measure will fall $1.1 trillion from $25 trillion at the start of this year.
“This is a very big liquidity drain,” says JPM strategist Nikolaos Panigirtzoglou. “We have rarely seen something like that. It’s only in severe crashes like the Lehman crisis where you see something like that contraction.”
He forecasts a 5% hit to the combined performance of stocks and bonds this year. Analysts at Citi, meanwhile, project a 5.4% drop in the S&P 500 over a two-month span once the full scope of new Treasury auctions comes into view.
Stupid Government Tricks, Scotland Edition
What does it take to get a third of the population somewhere to turn out for a protest?
On Sunday, a protest convoy gathered on the island of South Uist in the Outer Hebrides, about 40 miles off Scotland. It numbered “around 500 residents, 200 cars, 40 vans and 20 trucks,” according to the Daily Mail.
The state-owned ferry service called CalMac has cancelled nearly all service to the mainland for the month of June — peak tourist season, at that.
“Scotland is in the grip of a ferry shortage that has been made worse by lengthy delays in the construction of two new vessels in Port Glasgow.” says the Mail.
It’s a government project, originally projected to cost $120 million and has swelled to at least three times that amount. Oh, and it’s five years behind schedule.
“People are depressed - the government thinks we are expendable,” says John Daniel Peteranna of the Lochboisdale Ferry Business Impact Group..
'The money has just been squandered, it hasn't been put in the right places,” says Chris Brooks, who runs a bed and breakfast. “People are missing weddings and funerals, and being able to spend time with dying loved ones.”
Leave it to government to screw up an island paradise…
Social Security and a “Con-Con”
We got a somewhat baffling letter from a reader — but his concerns come from the heart, so we’ll do what we can to address them.
The subject line was “Debt ceiling - Article V of the Constitution.” We reproduce it verbatim…
“The AOG issued a stunning report in May 2023. It says that Social Security and related hospitalization benefits will become insolvent in 10 years. Why?, our government stole it, misappropriated it for something else. What's more, this report, which was given to all of Congress and the President, sounds the alarm that the profligate spending is unsustainable. Did one person refer to this amazing revelation? No, they did not.
“Mason and Madison saw where a Congress would go once it was elected every two years and lost control of governance. They gave the States the power to revert back to a States Convention. Under Article 5, we need 38 states to vote in an Amendment to the Constitution to restore fiscal responsibility to our government.
“See Mark Levin's broadcast of Life, Liberty and Levin of 6.4.23 for the sections he would propose to include in the Amendment to rein in the 100 year effort to transfer our wealth and bankrupt America.”
Dave responds: Not with the constitutional convention again!
I don’t get it. There was a time when conservatives were scared out of their wits at the prospect of a “con-con.” Now they can’t wait to get one underway because they’re soooo sure they can push through a balanced-budget amendment or whatever’s their hobby horse of the day. Somehow, they don’t seem to think liberals would ever hijack the proceedings to, say, abolish the Electoral College. It’s daft.
Anyway… contrary to so much of what you hear, Social Security is salvageable with some combination of higher taxes and a higher retirement age. In fact, I still wouldn’t rule out the possibility that Congress and the White House could get something done before year-end; it’s happened before under “divided government.”
What’s not salvageable, and what you should worry about more, is the health care system. Medicare and Medicaid now eat up 34.6% of the federal budget — up from only 12.4% in 1990. The trajectory is unsustainable, and when the system breaks — almost certainly before the end of this decade — it will break catastrophically.
We’re going to have to return to that topic sometime this summer to give it the first in-depth treatment we’ve done for several years. Thanks again for the reminder…
Best regards,
Dave Gonigam
Managing editor, Paradigm Pressroom's 5 Bullets
