This week, I wanted to share a few interesting links, together with a short comment on why it might be worth your time.
And also a few news that should help you make more sense of the world.
Write-ups
An in-depth analysis of record youth unemployment in China. The post-pandemic job market is very challenging, especially for young graduates. Lots of pertinent data points, including previous Chinese unemployment crises. The topic is also discussed further by Mark Kruger. Not dramatic yet, but very important for the global economy.
A defense of coal as a commodity which still has a lot of potential in this cycle. Coal is the energy commodity I never had the nerve to buy, to my detriment. Still, I prefer for myself oil or even gas, but the arguments brought by
are convincing. So is his “fat pitch” for the energy sector in general, which I agree with.A deep-dive on Alibaba, ahead of the conglomerate being split into 6 different entities.
A short profile of non-Chinese rare earth producer Lynas.
The coming decline of US shale and its implication for the world’s energy supply: “From here on out, just six counties in West Texas must meet all global demand growth“.
A great compilation of links about the world leader in batteries, China’s CATL.
News
Energy
China just approved a thorium reactor design, that also can be powered without the need for water or liquid coolant. In the long run, this is likely the kind of design we want for nuclear power plants. With India and China having some of the largest thorium reserves in the world, they could power themselves for millennia without needing any imports.
“Most of the US faces an elevated risk of blackouts in extreme heat this summer”. This risk is especially acute in the (likely) event of wind power failing to deliver during a heat wave. The fuel supply of gas via pipelines and coal mines closing compounds the problem.
And the trouble with shale production growing or even staying at current levels going forward.
Macroeconomics
I often comment about the poor state of the Western industrial base. At the very least, it is getting corrected in the US, even if it seems to be mostly driven by chips and solar panel factories, more than shipyards, steel mills, pharmaceuticals, and more essential capacity.
Meanwhile, Germany is de-industrializing, with BASF busy opening factories in the USA and in China, and closing facilities in Germany.
And an in-depth look at “The Shanghai International Gold Exchange and Its Role in De-Dollarization“. De-dollarization is a process, as gold is the only credible asset that can be neutral enough to be accepted among present and future (at least 18 more countries) members of the BRICS.
With an upcoming announcement regarding a potential BRICS currency in August, a better understanding of the monetary piping being put in place can be useful. Essentially, you use yuan and you can convert surplus into gold instead of yuan, making it a LOT safer than USD which can be confiscated on a whim.
Geopolitics
Pre-positioned US military inventory is far from combat-ready, even if it is supposed to be. Contractors leeching off the Pentagon seems the core of the issue. But who cares, right…
The team subsequently found that all six howitzers had operational issues. Four of the six howitzers had breech blocks improperly aligned with the rack gear, which prevented the breech from correctly locking. A breech not properly locked could result in an explosion that could kill the crew, the report noted.
Problems with the Humvees included dead batteries, inoperative lights, faulty gauges, damaged seat belts, broken door lock latches and fluid leaks, the report listed.
And the commander stated the contractor “is not contractually obligated or appropriately resourced to maintain [APS] equipment” at standards laid out in the technical manual the inspector general followed to make determinations regarding mission-capable readiness of the equipment.
An excellent speech done at a Conference in Estonia, aptly titled “The Rest’s Rebellion Against the United States“. And a positive sign that at least some people in the establishment are waking to the new reality of international relations:
Even though a tiny handful of states have sided with Russia in successive UN resolutions in the General Assembly, significant abstentions, including by China and India, signal displeasure with the United States.
In the so-called “Global South,” and what I am loosely referring to as the “Rest” (of the world), there is no sense of the U.S. as a virtuous state. Perceptions of American hubris and hypocrisy are widespread.
Elites and populations in many of these countries believe that the system was imposed on them at a time of weakness when they were only just securing their independence. Even if elites and populations have generally benefitted from pax Americana, they believe the United States and its bloc of countries in the collective West have benefitted far more. For them, this war is about protecting the West’s benefits and hegemony, not defending Ukraine.
This is a mutiny against what they see as the collective West dominating the international discourse and foisting its problems on everyone else, while brushing aside their priorities on climate change compensation, economic development, and debt relief. The Rest feel constantly marginalized in world affairs. Why in fact are they labeled (as I am reflecting here in this speech) the “Global South,” having previously been called the Third World or the Developing World? Why are they even the “Rest” of the world? They are the world, representing 6.5 billion people. Our terminology reeks of colonialism.
A position not so different from Chinese commentary about the turn to multipolarity: “In resisting multipolarity, the US is ultimately waging war on reality”
Unipolarity has been the Dutch Disease of US foreign policy. Under unipolar order, the only restraint is self-restraint, which the US has never been good at. The fact that the US could do what it wanted to whomever it wanted is celebrated as freedom.
In seeing coercive violence as the solution to every problem, US diplomacy has atrophied, and its worldview narrowed. Its political elite has grown more ineffectual, narcissistic and ideological.
Today they navigate by a map of the world and a sense of superiority made in 1991 and are enraged when reality fails to conform. Even as their wars and sanctions backfire, they double down with ever more self-destructive plans. In resisting multipolarity, the US is ultimately waging war on reality.
Speaking of reality dawning on some connected people at least, this article from Politico is full of interesting data, as well as a welcome contact back with reality, even if still rather rich in neo-con lingo and half-lies: “The Pentagon Is Freaking Out About a Potential War With China (Because America might lose.)“ :
But a swift response may not be possible, in large part because of how shrunken the U.S. manufacturing base has become since the Cold War.
Among the deficiencies: components of solid rocket motors, shell casings, machine tools, fuses and precursor elements to propellants and explosives, many of which are made in China and India.
China also totally dominates machine tools and rare earth metals, essentials for manufacturing missiles and munitions, as well as lithium used in batteries, cobalt and the aluminum and titanium used in semiconductors. While Beijing has made new advances in explosives, most American military explosives are made at a single aging Army plant in Tennessee
And speaking of advances in explosives, the bombshell (pun intended) news dropped that Chinese researchers have found how to significantly improve CL-20, an important military explosive. Despite the molecule coming out of a US lab.
The only limitation was that “its high production costs have limited its widespread adoption“, as well as some instability. And it seems the general problems of priorities and organization in the Pentagon are the reason for such underperformance.
Data from Georgetown’s Center for Strategic and Emerging Technologies, over the last five years, says Chinese researchers in energetics materials have published nearly seven times as many papers as their American counterparts.
The feat by the team of scientists led by Guo Changping from the Sichuan Military and Civilian Co-Innovation Center is expected to allow mass production, which is nearly impossible owing to its extreme sensitivity to any shock.
The tactical benefits of smaller missiles with longer ranges and speed with deadlier warheads in a theater like the Western Pacific are immense.
Work on energetics is balkanized among different R&D units of the military, with no senior official playing point and advocating at a high level for change.
While the government has been aware of problems for years – in 2012 the DoD stood up a panel called the Critical Energetics Working Group to reduce the number of single points of failure in the explosives supply chain – observers say they’ve been overshadowed by other priorities.
To make matters worse, the U.S. depends on China as the single source for about a half-dozen chemical ingredients in explosives and propellants, and other countries of concern for another dozen.
And the final note is the admission of Ukraine being actually “An Unwinnable War“ by Foreign Affairs, with the goal of switching to turning it into a frozen conflict like the Korean War.
Something that as I explained previously, will not happen regardless of the wishful thinking in DC.
That's an excellent compilation! Thank you...