'The USA has depleted all its economically viable sources of oil and gas, all its remaining sources have woefully low EROI and hence are super costly (energy wise and hence price wise) to extract, process and transport. Fracked shale oil is nothing like crude oil, it has the API index and volatility of paint thinner, which is why the trains used to transport it are called “bomb” trains. You cannot make diesel, the indispensable workhorse fuel, from fracked shale oil.
Russia, along with the Caspian area, has in aggregate gone past the peak of oil production, with declining EROI (with only a few fields pre-Peak eg Kashagan). However compared with the USA, the Eurasian oil and gas sources have a far higher EROI, which is IMPOSSIBLE for the US to economically compete with. The fact the the USA is now depleted of easy, cheap oil is the reason they are now stealing oil from Syria and also why they hijacked several Iranian oil tankers. Pipeline terrorism was the only way the US could sell uneconomic LNG to Europe, just as provoking a war was the only way the US could “sell” their obsolete old ordnance to Europe. Dirty tricks and devious skulduggery is how the US “free market” and “rule based order” operates, indeed how it has always operated.
The US financial sector: It was the drug crazed dream of the USA that sanctioning Russia would cause Russia to economically collapse which would then spur a coup d’etat against Putin. This goal backfired spectacularly after Russia demanded energy payments in Rubles, which caused the Ruble to appreciate beyond all expectations. Sanctioning Russia’s fossil fuel exports only caused the European and global price of oil and especially natural gas to skyrocket, leading to a huge financial windfall for Russia, which by now has largely compensated for the US theft of $300 billion of Russia’s foreign reserves. In times of global uncertainty, many nations move their financial assets into US treasury bonds / securities as a default “safe haven” which has kept the US dollar value afloat so far. However those nations now also realize that their savings could be arbitrarily stolen at any time by the US “rules based order”, hence they are figuring out ways to shift their reserves. At present the European currencies have fallen against the USD, primarily as a result of their own energy sanctions against Russia which has caused the recession of their own economies. The European industrial sectors are poised to collapse from energy starvation. Once the BRICS+ currency arrangements and financial systems, which bypass the USD, get up and running, there will be massive flight of away from US bonds and securities and the massive international repatriation of US dollars back to the US, which will result in hyperinflation and devaluation of the US dollar, resulting in their inability to afford any imports. Along with the deindustrialised condition of the USA, resulting in no significant domestic manufacturing, that all spells extreme poverty for “Exceptionalistan”.
In summary: any initial hopes by the US banking/financial sector that they might benefit from the Ukrainian war have at best resulted in the USD remaining neutral so far, but will inevitably lead to the accelerated collapse of the USD.
CONCLUSION: The USA is screwed. Get over it.'
Full article:
http://thesaker.is/cui-bono-the-big-picture/
Anonymous
Imagine that a superpower declared war on a great power and nobody noticed. Joe Biden this month launched a full-blown economic war on China — all but committing the US to stopping its rise — and for the most part, Americans did not react.
ReplyDeleteHistory is likely to record Biden’s move as the moment when US-China rivalry came out of the closet. America is now pledged to do everything short of fighting an actual war to stop China’s rise.
It is not clear that corporate America, or its foreign counterparts, have fully digested what is about to hit them. For decades, serious businesses have based their growth models on having a China strategy — whether it be by exporting to China, or producing there, or both. Unless a company’s product is, say, luxury goods or agricultural commodities, Biden’s technological decoupling will hit their bottom line. His escalation also marks a final break with decades of US foreign policy that assumed China’s global integration would tame its rise as a great power.
America’s conversion to China containment is bipartisan. It was one thing for Donald Trump to target Huawei and ZTE, the Chinese telecoms conglomerates, and aim for managed trade. It is another for Trump’s Democratic successor to isolate China’s entire high-tech sector. It is notable there are no prominent voices raised in either political party against US-China decoupling. Washington’s China politics is now about which party can get more to the right of the other.
There are two big risks to Biden’s gamble. The first is that America is now close to making regime change in China its implicit goal. The new restrictions are not confined to the export of high-end US semiconductor chips. They extend to any advanced chips made with US equipment. This incorporates almost every non-Chinese high-end exporter, whether based in Taiwan, South Korea or the Netherlands. The ban also extends to “US persons”, which includes green card holders as well as US citizens. That presents a binary choice between America or China. Most will choose the US. But there are tens of thousands of Chinese green card holders who will now be inclined to believe Beijing’s claim that there can be no such thing as divided loyalty.
The hit to China’s economy will be far bigger than the word “semiconductor” implies. Biden’s move draws on the premise that any advanced chip can be used by China’s military, including for nuclear weapon and hypersonic missile development. It is also meant to undercut China’s goal of dominating global artificial intelligence by 2030. But all such chips are dual use, which means that the US is now committed to blocking China in all kinds of civilian technologies that make up a modern economy.
In Chinese eyes, it will look like the US wants to keep communist China permanently down. It is no great leap from that to regime change.
The more imminent risk is that Biden’s gamble could prompt Xi Jinping, China’s president, to accelerate his timetable for Taiwan reunification. The island state is by far the world’s largest maker of high-end chips. That Biden’s move took place shortly before China’s 20th party congress, which ends on Saturday with a likely third five-year term for Xi, is notable. Many China watchers think Xi wanted to put the party congress behind him before turning to his vow of fixing the Taiwan problem. Biden could have made a violent resolution to China’s Taiwan policy more likely. He could equally have given Xi pause for thought. We will find out.
What we do know is that national security is once again the lens through which Washington sees the world. Rest in peace “the world is flat” and the “end of history”. The US has endorsed a zero-sum metric in which China’s rise is seen as being at America’s expense. You could say that Biden is belatedly reacting to what China has been talking about for years — with increasing unsubtlety by Xi. But that is hardly reassuring. It means that the world’s hegemon and its only serious rival now see each other through the same lens. As is usually the case in history, nobody else gets much of a say.
This reckless move by the Americans would lead to more reactions by China. The decoupling of the two economies would be complete soon.
ReplyDeleteWho would come up stronger at the end is yet to know. One thing for sure, all the American chip companies would go down just like the European countries. China would work towards more self reliance and still could rely on the rest of the world as its top trading partners and a huge domestic market.
More and more areas would be decoupled. WW3 has been launched by the evil Americans.
"It is notable there are no prominent voices raised in either political party against US-China decoupling" unquote.
ReplyDeleteNot surprising, as both political party carry the same agenda of preventing China's rise. They are the right and left hand of the powers behind, controlling all the operatic moves.
Looking at Trump's administration attitude towards China, how different is it from Biden's? Trump tried trade war and COVID19 without any resounding success. China still did not collapse. Biden is now using the chip stranglehold to stifle China. Will China collapse?
Russia was so arrogantly and gloatingly portrayed as a sure to collapse entity from the USA led sanctions. Biden said the Ruble will turn to rubble, and Russia's economy will surely collapse, and the people will rise up against Putin. One trump card from Putin changed all that. It now turns out that it is the people in Europe rising up against the EU and NATO, that indirectly means targeting the USA that is pulling the strings inside NATO.
All the American chip makers would fold first before anything could happen to Chian. China is their biggest market and biggest customer. Without China they have no one to sell to.
ReplyDeleteSame thing happened to silly Australia.
Before USA can corner the high end chip manufacturing sector to prevent China from accessing such technology, just remember that essential materials for making chips are still largely not in their hands or within their total control.
ReplyDeleteRussia still controls many essential materials for chip making, like Neon and Palladium. Likewise, China still controls a major share of rare earth production, essential for military usage. When a push becomes a shove, China could cripple the USA's military with prohibition of rare earth exports to the USA.
With China and Russia now co-operating in chip manufacturing expertise, do not bet on their inability to overcome those problems now created by the USA. Sure, there will be short term difficulties for them, but once these problems are solved, and both countries become self reliant, chipmakers of Japan, Taiwan and South Korea will suffer the consequences. Then, denied the Chinese market, who will soak up their chips? China may even be more competitive and outcompete them on the global market. Who will buy more expensive chips made in the USA? MacDonalds?
What USA is doing to the chipmaking sector in Taiwan, South Korea and Japan by forcing them to counter China, is essentially the same as what they have done to Europe in energy. The Europeans have now been thrown under the bus to fulfil the USA's desire to contain Russia.
ReplyDeleteThe Europeans were promised independence in energy supply by cutting reliance on Russia, but instead of that, they are held hostage by the USA, having to import much more expensive gas from them.
The main chip manufacturers of the world better learn their lesson from Europe before it is too late.
At the crazy pace the Americans are pushing TSMC, very soon TSMC would realise that moving to the US would be the end of TSMC. They might as well sell TSMC to China or join force with SMIC to become a bigger chip manufacturer free from American coercion.
ReplyDeleteWho knows they may be negotiating just to do this and TSMC would continue as it is in Taiwan, in a united China and become the heroes of the Chinese people.
Without TSMC, it would be game over for the Americans.
The South Koreans and Japanese chip makers are not buying the USA's 'four party chip alliance' to counter China.
ReplyDeleteThe South Koreans and Japanese are said to be still building chip manufacturing facilities in China, knowing that their future still have to rely on the Chinese market. No getting away from that.
So, that 'four party chip alliance' is just Biden's dementia wet dream, and is ineffective to say the least. Like all of Biden's 'midas touch in reverse', it fell apart even before starting.
Biden's promise of 'Build Back Better' dream died at birth. Biden's US$600 billion infrastructure investment to counter the BRI died during conception. Biden's plan to destroy Russia backfired badly on Europe and itself. Biden's attempt to bring down oil and gas prices never got off the ground and is getting worse instead. Biden's plan in Ukraine is also in tatters.
OPEC+ just basically ignored his plea to cap oil prices and they did the opposite to snub him. He promised 'consequences' for Saudi Arabia over the oil cuts, but backtracks afterwards. You see, he dared not do anything to Mohammed bin Salman, fearing MBS cutting off the Petrodollar in the oil trade. That will be the end of the US$ as a world reserve currency.
What the USA wants is for TSMC to transfer it's high end chip manufacturing expertise to them. By asking TSMC to invest in Arizona, that means they will get the technology transfer.
ReplyDeleteOn the surface it looks like the Taiwanese agreed to the constructon of the chip manufacturing facility in Arizona, but behind the scene, we do not know how much pressure had been exerted on TSMC to do so.
In this way, the USA cannot be said to be stealing technology from TSMC. It is a business arrangement, same as USA companies in China. How convenient! But if China does it, China is stealing. For a thief, a steal is not a steal.
Liz Truss, the shortest PM of UK, has announced her resignation.
ReplyDeleteJust two days ago, she was still very adamant not to resign.
She still thought that despite all her mismanagement and staff bungled, she could still pull through.
This is one temporary PM who does not really qualified for the job. However, British racism had made her the PM that she is not. What a shame!
The UK Parliament is turning into a circus with bozos in all corners clowning around.
ReplyDeleteThis is the end days of the Brits before the Indians, Pakistanis and Africans take over the island as compensation for the days of colonisation.
Liz Truss backers are the Oligarchs and very rich people. Those are her circle of friends. Her first step in office was cutting tax for the super rich, cutting bonus ceilings for top bankers. That was the giveaway. All that means she has to resort to issuing bonds and using debts to cover the tax shortfall, besides attempting to cut essential spending on critical areas. She probably wanted to follow the USA's money printing formula. UK is not like the USA and the Pound is not a global reserve currency in any case.
ReplyDeleteShe thought she could just push the blame to Kwarteng altogether when it failed. She used him as scapegoat for all the above when it failed. It did fail and failed miserably.
All in all, she is not capable enough for the job. But I think she made history for her short stint as British PM. What a record!
Good riddance!
ReplyDeleteThe moment she accepted the PM job, I knew she was going to bungle.
She has made her mark as the most Inefficient and ineffective temporary PM in the UK history! What a disgrace!
Lesson learnt:
If you do not have what it takes to be a PM material, don't even try.