Green Smokescreen

  • Ray Blanco on recycling’s green smokescreen
  • Deceptive lobbying practices, 1974 edition
  • Electrical transformers: More — and less — than meets the eye
  • Update: Ford reinstates AM radio 
  • “No blood for chips!”... “Amen!”... “God bless you, Dave Gonigam” (Too much?)... “We should protect [Taiwan]... And much more!

Like karma, the law of unintended consequences is — a female dog.

New research “adds to growing concerns that recycling isn’t as effective of a solution for the plastic pollution problem as many might think,” says a story in — of all places — The Washington Post.

“A recent peer-reviewed study that focused on a recycling facility in the United Kingdom suggests that anywhere between 6–13% of the plastic processed could end up being released into water or the air as microplastics — ubiquitous tiny particles smaller than 5 millimeters that have been found everywhere from Antarctic snow to inside human bodies.”

News like this falls into a category that Paradigm’s technology specialist Ray Blanco calls “Green Smoke.”

Just as our macro maven Jim Rickards has been alerting readers to the economic fallout from what he calls the “Green New Scam”... Ray is on the lookout for do-gooders blowing Green Smoke up our collective rear ends.

His motive, however, is not political: “We take a special interest in these tricks, scams and plots as the Green Movement and its government incentives are driving many tech industries, such as EVs and renewable energy sources.”

Follow the money. Like it or not, your portfolio and your prosperity might depend on it.

Which brings us back to the subject of plastic recycling…

“Whether your empty water bottle ended up in your home wastebasket, put out with the recycling or deposited properly in the ‘plastics’ bin,” says Ray…

“... It’s a near certainty that it will end up in the same place. Either incinerated or put in a landfill along with all of your other trash.”

Even the do-gooders and world improvers at The Economist admit as much on their inside pages…

the end

A profusion of microplastics isn’t the only problem with plastic recycling.

For instance, “Giant, high-emission trucks are making rounds just to pick up your papers and plastics,” says Ray. “Then, in an issue often referred to as ‘wish-cycling,, materials that can’t be used at the recycling centers (which are a majority of them) now need to be moved, by truck, to another location.

“This doesn’t even take into account the facilities, time expenditure and supplies needed to sort and process the plastics once collected.”

But the whole plastics-recycling thing was done with the best of intentions, right? You wish.

“In fact,” says Ray, “the campaign was originally pushed by the Society of the Plastics Industry (now the Plastics Industry Association), a lobbyist group that represents the likes of Exxon, Chevron and DuPont.

“Recycling was pushed on the public to make plastics more palatable, since they could be reused. In theory.”

As long ago as 1974, industry insiders were telling each other it was cheaper to use oil to make new plastic than it was to recycle old plastic. “There is serious doubt,” said one, “that [recycling plastic] can ever be made viable on an economic basis”.

And 1974 was the year after the “oil shock” in which crude prices suddenly quadrupled!

But economic viability wasn’t the point. The point was that, as former Society of the Plastics Industry president Larry Thomas said, "If the public thinks that recycling is working, then they are not going to be as concerned about the environment.”

Bottom line: The push for plastics recycling “is an example of the doubly harmful use of Green Smoke,” Ray concludes — “hiding harmful practices under the presumed goal of a cleaner planet, while harming the legitimacy of people and practices who are actually trying to make a difference.”

[Editor’s note: While Ray will continue to follow the money from Green Smoke, there’s another opportunity on his radar that’s much more immediate and urgent.

This one’s in the biotech sector — and it has to do with a tiny company and a patent it was awarded on Jan. 11 of last year. “It received almost no press attention at the time,” he says, “but due to a major breakthrough, this tiny stock and their breakthrough patent could become a breaking story and hit the front pages of The Wall Street Journal, The New York Times and more.”

Of course once that happens, all the easy money will have been made. The time to move is before it becomes headline news. Check out Ray’s presentation right now at this link.]

It seems nothing is catching a bid in the markets today — other than oil.

Whether it’s debt-ceiling jitters or something else (or nothing at all), the major U.S. stock indexes are adding to yesterday’s losses — all of them down about three-quarters of a percent as we write, the S&P 500 at 4,112.

Bonds are selling off — prices down, yields up. The 10-year Treasury note is up to nearly 3.72%, the highest since mid-March.

Gold is down $14 to $1,961 an ounce and silver is only 8 cents away from cracking below $23. Copper has sunk to levels last seen in early November at $3.56 a pound. And at $26,300, Bitcoin sits at two-month lows.

But crude is up $1.63 to $74.54, a three-week high.

Markets might get a jolt at midafternoon when the Federal Reserve releases the minutes from its meeting held three weeks ago. We shall see…

And now some disquieting developments for the U.S. power grid — all relating to electrical transformers.

It was last September we first started noticing articles in the trade press about long delays and skyrocketing costs for utility companies seeking transformers. That’s bad news for a power grid already under stress.

As a result, electrification projects are now being delayed or even cancelled: The NBC affiliate in Greenville, South Carolina, reports that some of the area’s many newcomers are shocked to discover construction of their new homes has been halted — for lack of transformers.

“It's nationwide,” says Anthony Kent of Cothran Homes — whose 107-townhome development is at a standstill.

“There are only three suppliers in the U.S. Eighty percent of transformers come from overseas. With the shortage of materials, metallic sand and copper, it's put a huge strain on the system in the United States.

“When you find out you can't get a transformer, all things come to a stop at that moment because we can't go forward with closing homes or selling homes. We can't tell people when a home will be ready to move in."

Meanwhile, the lone U.S. manufacturer of the specialty steel needed for transformers is at loggerheads with the White House.

“America needs vastly more transformers to power the administration’s ambitious clean energy, manufacturing and infrastructure plans,” reports Politico, “but the only U.S. producer of the specialty steel needed to make the units, Ohio-based Cleveland-Cliffs, says it won't ramp up production unless the Biden administration puts additional duties in place [on imported steel].”

Already the shortage of distribution transformers has extended lead times to over 12 months; more than 20% of utilities have delayed or cancelled new grid projects.

A consortium of power-industry groups fired off a letter to the White House this week, asking Joe Biden to convene a summit “to help solve the current supply chain crisis that threatens both the national security and economic outlook for the United States and to deliver on this administration’s goals for electrification and decarbonization.”

Another wrinkle is the Energy Department’s new standards for transformers, set to take effect in 2027. According to the Utility Dive website, “Supporters say the new standards would cut energy waste by up to 50%, but utilities and others say new requirements could make transformer replacements even more scarce.” Just swell…

Before the mailbag, a quick update: Ford says it will return AM radios to its line of electric vehicles next year… and previous models lacking AM will get a software update.

Left unsaid by Ford is what it’s doing to address the problem of electric motors creating interference for AM radio signals. That’s the whole reason many EV manufacturers are dropping AM, much to the consternation of lawmakers on both sides of the aisle.

We took up the legislative push on Tuesday; essential background to the story can be found here.

“Dave, thanks for being willing to step out on the proverbial limb and ‘get controversial,” writes a reader after yesterday’s single-topic edition.

“Too many people are oblivious to what the U.S. is doing on the world stage by way of provoking and/or aggravating conflicts. The war in Ukraine is a prime example.

“In times past, the U.S. would be at least paying lip service to trying to broker peace negotiations in conflicts that theoretically didn’t directly involve the country. There’s been utter silence in that regard lately. Instead, the government continues to escalate its involvement in the Ukraine war, marching forward across various ‘lines in the sand’ that it had drawn. Promises not to do this or that are routinely and conveniently forgotten.

“It’s time for the American people to wake up and say, ‘Enough is enough!!’

“Keep spreading the truth.”

“God bless you, Dave Gonigam,” says another.

[OK, that’s just over the top — but go on…]

“We can't retreat in fear, but neither can we be the bully of the world. ‘Millions for defense, but not one cent for tribute.’ That includes tribute for our butt-hurt politicians and industrial 'leaders.'”

“Thank you,” says another, “for the added insight into the global tensions. Too bad that Washington will continue down this evil (don't know how else to say it ) path to the detriment of most Americans. Hopefully people wake up.”

“Amen!” begins our next entry with some intriguing backstory.

“People seem to think that if Beijing simply occupies/controls Taiwan they can manufacture the same leading-edge chips for which TSMC is justly famous. They don’t do this in China now. If they could, why wouldn’t they? (I recommend an article from Wired titled ‘I Saw the Face of God in a Semiconductor Factory.’) I don’t believe that this kind of work, in particular, can be done under duress. Just think about Russia’s farm equipment production under the USSR.

“China might stop the flow of chips from Taiwan, but Samsung in South Korea is making them, and in a couple of years they will be made in the U.S. as the factories are already being built. What we should be planning is how to evacuate anyone who works for TSMC or their many Taiwan-based suppliers should they want to leave at some point.

“If China occupies Taiwan, we might have shortages or disruptions, but life as we know it wouldn’t come to a halt. A nuclear war, on the other hand… We don’t need to fight a war with China. We just need to be restrained and patient until the “One Child Policy” comes to fruition. That die is already cast.”

We did get a dissenting note, from a reader who lived in Taiwan for 20 years — and he was kind enough not to label me a “panda hugger.”

Taiwan, he says, is “very different from Ukraine. Twenty-three million hardworking free people with minimal government interference in business and personal liberties. Military service by all males is required. Potentially 11 million army soldiers.

“Taiwan will fight. China will not want to lose the one child born per family. In mainland China one child supports six older family members. China will not want casualties.

“China has the Three Gorges Dam. This is a big risk. India, Taiwan, Japan can hit it with hypersonic missiles and flood half the country. Attacking Taiwan is not worth the risk.

“China is all talk. No war if Taiwan is supplied with arms.

“Taiwan has more democracy and cleaner elections than the USA. They have fewer police and business thrives under capitalism. Better-organized government and better infrastructure than the USA. Many different populations in Taiwan with three languages — Mandarin, Hakka and Taiwanese.

“Japan politeness with U.S. business structures. We should protect them.”

The 5: In 1832, British Prime Minister Charles Grey was on the verge of launching a foreign war. It had been less than 20 years since the end of the Napoleonic Wars.

It was too much for the writer and cleric Sydney Smith — who penned a letter to Grey’s wife, urging her to “secure Lord Grey’s swords and pistols, as the housekeeper did Don Quixote’s armor”...

For God's sake, do not drag me into another war! I am worn down, and worn out, with crusading and defending Europe, and protecting mankind; I must think a little of myself.

I am sorry for the Spaniards - I am sorry for the Greeks - I deplore the fate of the Jews; the people of the Sandwich Islands are groaning under the most detestable tyranny; Baghdad is oppressed, I do not like the present state of the Delta; Tibet is not comfortable. Am I to fight for all these people?

The world is bursting with sin and sorrow. Am I to be champion of the Decalogue, and to be eternally raising fleets and armies to make all men good and happy? We have just done saving Europe, and I am afraid the consequence will be, that we shall cut each other's throats… If there is another war, life will not be worth having.

Nearly two centuries later, Smith’s words capture the exhaustion of Americans whose government has been meddling overseas nonstop since the advent of the Truman Doctrine in 1947.

We conclude with the words of Smith’s American contemporary, President John Quincy Adams. As secretary of state in 1821, he delivered an Independence Day address to Congress. It is refreshingly free of the “redeemer nation” rhetoric that’s been the stock-in-trade of U.S. politicians for the last 75 years…

Wherever the standard of freedom and Independence has been or shall be unfurled, there will [America’s] heart, her benedictions and her prayers be. But she goes not abroad, in search of monsters to destroy.

She is the well-wisher to the freedom and independence of all. She is the champion and vindicator only of her own.

Best regards,

Dave Gonigam

Dave Gonigam
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