Month: July 2022

At the same time as it give the Biden admin a token victory by overturning Trump’s “remain in Mexico” rule, the US Supreme Court also struck a major blow to Biden’s fight against climate change, when in a landmark ruling, the SCOTUS also curbed the ability of America’s top environmental regulator to limit greenhouse gas emissions, siding with coal miners and Republican-led states.

In a majority opinion authored by chief justice John Roberts, the justices ruled that in the latest example of Democratic overreach, the Environmental Protection Agency was not specifically authorized by Congress to reduce carbon emissions when it was set up in 1970. The ruling leaves the Biden administration dependent on passing legislation if it wants to implement sweeping regulations to curb emissions.

The opinion from the court’s conservative majority said that “a decision of such magnitude and consequence rests with Congress itself, or an agency acting pursuant to a clear delegation from that representative body”. The justices added they doubted Congress intended to delegate the question of “how much coal-based generation there should be over the coming decades, to any administrative agency”.

The dissenting opinion authored by justice Elena Kagan and joined by the court’s other two liberal justices said the EPA had the authority to regulate “stationary sources” of polluting substances that are harmful to the public, adding that curbing the output of greenhouse gas emissions was “a necessary part of any effective approach for addressing climate change”. In other words, the usual green tripe that has sent the country to the edge of a hyperinflationary commodity disaster.

“This Court has obstructed EPA’s effort from the beginning,” Kagan wrote. “The limits the majority now puts on EPA’s authority fly in the face of the statute Congress wrote.”

As the FT reports, at the heart of the case is a disagreement over how broadly the EPA should be allowed to interpret portions of the 1970 Clean Air Act, particularly the sections that direct the EPA to develop emissions limitations for power plants.

Dubbed West Virginia vs EPA, the case was brought by a host of Republican attorneys-general and the coal industry. Their argument centres on a regulation that never took effect: an Obama-era proposal known as the Clean Power Plan, which would have mandated that power plants make 32 per cent reductions in emissions below 2005 levels by 2030. The Supreme Court ordered that rule to be suspended in 2016.

That rule was later torn up by the Trump administration in favor of its Affordable Clean Energy rule, designed to support the coal industry. The Trump administration’s regulation, however, was struck down by the US Court of Appeals for the DC Circuit last year.

Challenging the lower court’s reversal of Trump’s rule at the Supreme Court, West Virginia has argued that the Obama-era Clean Power Plan relied on an overly broad interpretation of the Clean Air Act and gave the EPA excessive and “industry transforming” power.

West Virginia argued that the lower court’s interpretation of the law granted the EPA “unbridled power” to issue significant rules that would reshape the US electricity grid and decarbonise sectors of the economy. It said the EPA should only have very limited authority to regulate emissions inside “the fence line” of power plants, and cannot apply broader industry-wide measures like carbon credit trading or biomass co-firing.

Defending the case, Biden’s EPA has said that nothing in the Clean Air Act makes a distinction between inside the fence line measures and broader, industry-wide regulatory measures. It added that West Virginia’s “real concern” was that the agency might introduce some elements of Obama’s Clean Power Plan into a future rule. But the EPA said that the Supreme Court is not authorised to issue an advisory opinion on the types of measures a future rule could contain.

Dick Durbin, the Democratic whip in the Senate, predictably said the decision was “a dangerous step backwards and threatens our air and our planet”, adding it “sets a troubling precedent both for what it means to protect public health and the authority regulatory agencies have to protect public health”.

What he means is that the US may once again be on the path to becoming self-sufficient in energy, and not peddling money to corrupt “green” lobbies and interests.

The ruling by the court’s conservative majority is the latest in a string of dramatic decisions that have challenged established legal precedents, including the recent reversal of Roe vs Wade. Last week, it also struck down a century-old New York state law requiring an individual to show “proper cause” to carry a concealed gun in public, deeming the statute unconstitutional. The court on Monday also ruled in favour of a former high school coach dismissed for praying at football games, fuelling the fraught debate on the separation of church and state.

Revised numbers on US GDP from the Bureau Of Economic Analysis indicate that the economy faces a deeper contraction than originally reported.  GDP shrank in the first quarter of 2022 by 1.6%; this is an impressive and sharp reversal from the fourth quarter of last year, which saw GDP grow by 6.9% due primarily to the continued circulation of covid stimulus dollars and consumer credit spending.   

It’s important to keep in mind that this plunge in GDP occurred BEFORE the Federal Reserve started raising interest rates.  Meaning, the Fed did in fact raise rates into economic weakness, much like they did during the onset of the Great Depression, causing even more damage to the economy in the process and prolonging the effects of the crisis.  The difference this time is that we do not face a standard deflationary threat, but a stagflationary one.  It’s a completely different ballgame.

Calls for recession are ample from the mainstream financial media and many alternative analysts, though the assumption among many is that price inflation will track down as the recession pressures grow.  This may not be the case.  

Loss of buying power in the dollar due to central bank stimulus and numerous supply chain issues indicate an extended period of price inflation well into next year.  Furthermore, with foreign central banks now incrementally dropping the dollar as the world reserve currency, there will be even more dollars flooding into the US from overseas. That’s too many dollars chasing too few goods and services.

With the GDP decline more pronounced that initially thought, will the Fed capitulate quickly and end rate hikes?  It’s unlikely as long as price inflation continues through most of the economy.  The Fed has made it clear that they are willing to let markets take a considerable hit as they pursue deflation.  Suggestions in the media that a recession will create an immediate “equilibrium” in markets and in prices ring rather hollow and naive.  These are the same people that were telling the world only a few months back that inflation was “transitory.”

Reflected in the fall in GDP is a growing concern among the public that the price explosion is going to eat away at their wallets and decrease their standard of living.  It is also a signal that credit cards are finally maxed out and covid stimulus measures have finally faded away.  When easy credit and stimulus move out of play the real economy is revealed, and in our case the true face is an ugly one. 

Authored by Michael Snyder via The Economic Collapse blog,

If countries in Europe are already beginning to ration certain things due to “supply problems”, how long will it be before it starts happening in the United States? 

Up until the past couple of years, many of us in the western world always considered shortages to be something that only “unsophisticated” poor countries on the other side of the planet had to deal with.  But the last couple of years have shown us that painful shortages can happen to wealthy countries in the western world too.  At first we were told that they were “just temporary”, but the months went by and we just kept having more shortages.  In fact, in 2022 “supply problems” have become so serious that many supermarkets in Europe have been forced to strictly ration essential items at various times.  For example, it was being reported that due to the war in Ukraine flour, sunflower oil and sugar were all being rationed by stores in Greece…

After limiting the sale of some flours and sunflower oil online, Greek supermarkets are turning to rationing the sale of sugar as well, now including in their stores, over supply problems.

The AB Vassilopoulos is setting a maximum limit on the purchase of all brands of corn and sunflower oil and of flour per customer while Mymarket put a ceiling on sunflower oil purchases and Sklavenitis has added sugar to the rationed sales of corn oil through its online store, with a maximum of four packs, the products in high demand from restaurants, some of which said they have to stop selling french fries and other fried foods.

Over the past few months we have seen similar measures implemented in other major European nations as well.  For example, the war in Ukraine prompted some pretty severe rationing in Spain…

Sporadic shortages of products like eggs, milk, and other dairy products also hit Spain since the war in Ukraine began. And major supermarkets including Mercadona and Makro began rationing sunflower oil earlier this month.

Now, stores will temporarily be allowed to limit “the number of goods that can be bought by a client,” according to information in the Official State Gazette published on Wednesday.

Looking forward, natural gas rationing is the next big thing that many people in Europe are talking about.  The flow of Russian natural gas into Europe has been cut back, and it appears that this may soon cause widespread rationing in Italy…

Italy may start rationing natural-gas consumption to certain industrial giants, after Russia’s Gazprom halved supplies on Friday.

On the weekend, the newspaper Corriere della Sera reported that the Italian government and energy industry would meet Tuesday and Wednesday to discuss the crisis, with the likely outcome being the introduction of a state of alert under the country’s gas emergency protocol.

And CNN is reporting that Germany is “one step closer to rationing supplies” now that Russia has decided to reduce the flow of natural gas going to that country…

Europe’s biggest economy is now officially running short of natural gas and is escalating a crisis plan to preserve supplies as Russia turns off the taps.

Germany on Thursday activated the second phase of its three-stage gas emergency program, taking it one step closer to rationing supplies to industry — a step that would deliver a huge blow to the manufacturing heart of its economy.

Of course there are other parts of the globe that are dealing with problems that are far, far more serious than what Europe is facing right now.

As I discussed in an article that I posted earlier this week, significant numbers of people are starting to literally drop dead from starvation in portions of eastern Africa.  Global food supplies just keep getting tighter, and the head of the UN is openly telling us that the world is heading into an “unprecedented global hunger crisis”.

So if you have plenty of food to eat tonight, you should be thankful.

Here in the United States, economic conditions are deteriorating fairly rapidly, and most Americans are completely and totally unprepared for any sort of a major economic downturn.  Earlier today, I came across yet another survey that shows that about 60 percent of all Americans are currently living paycheck to paycheck…

“We find that consumers in all income brackets — including those who make more than $100,000 annually — are living paycheck to paycheck. PYMNTS’ research finds that 61% of U.S. consumers were living paycheck to paycheck in April 2022, marking a 9 percentage point increase from 52% in April 2021, meaning that approximately three in five U.S. consumers devote nearly all of their salaries to expenses with little to nothing left over at the end of the month.”

So what is going to happen when those people start losing their jobs in large numbers?

Already, we have seen the number of tech layoffs greatly accelerate over the last couple of months.

Sadly, the layoffs will get much worse in the months ahead.

And as inflation continues to systematically eat away at our standard of living, Americans are turning to credit cards at a record pace…

As Americans grapple with the highest inflation in 40 years, the number of new credit cards have surged as more Americans rely on them to keep up with high prices. According to a recent report from the Federal Reserve, revolving credit (credit cards and lines of credit) increased by 19.6% from the previous year to $1.103 trillion.

Going into credit card debt is not a solution.

At best, it can buy you a little bit of time.

And it is especially a bad idea to go into credit card debt as we plunge into a recession.

At this point, almost everyone realizes that things are going to get bad.  According to one recent poll, a whopping 85 percent of all Americans believe that the U.S. is “headed in the wrong direction”…

The national dissatisfaction is bipartisan. Most Americans, 85%, say the country is headed in the wrong direction. A majority of Republicans have been unhappy with the direction of the country since Biden’s election. Democrats had been positive about how things were going, but now 78% say the country is headed in the wrong direction.

I was astounded to see that 78 percent of Democrats believe that the U.S. is headed in the wrong direction with a Democrat in the White House.

I have never seen a number like that ever before.

But this is just another indication that the hour is late and that things are about to start getting really crazy out there.

For the moment, life is still at least somewhat normal in the western world.

Sadly, it won’t stay that way for long, and so I would recommend using your time wisely.

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It is finally here! Michael’s new book entitled “7 Year Apocalypse” is now available in paperback and for the Kindle on Amazon.

Today in “saving the environment while destroying the entire global economy news”, major European auto manufacturer Stellantis is warning that unless EVs start to get cheaper, that the industry is “doomed” thanks to new deals to try and phase out internal combustion engines.

The company said it is looking to cut the cost of making EVs 40% by 2030, according to a new report from Bloomberg/MSN. This week, the EU pushed forward its agenda to stop the sale of all internal combustion vehicles by 2035. 

Chief Manufacturing Officer Arnaud Deboeuf said Wednesday that “the market will collapse” if electric vehicles don’t get cheaper. He called it a “big challenge”. 

Stellantis is doing their part trying to keep up with the increased government regulation – they are working on introducing more than 75 fully electric vehicle models this decade and transforming many of its French car plants to exclusively produce EVs. 

Stellantis is also working to develop 5 battery factories across North American and Europe, with the goal of producing 400 gigawatt-hours of cells by 2030. 

But EV prices have been rising, not falling. Tesla, for example, has raised prices by about $6,000 per vehicle this past month. Ford and Rivian have made similar moves, thanks to the rising cost of raw materials associated with EVs. 

Chief Executive Officer Carlos Tavares said that the new mandate shows that policy makers appear to “not care” about whether or not automakers have the raw materials necessary to be able to facilitate such a change. 

Increased battery demand between 2024 to 2027 will benefit Asian producers, he said, and will put at risk cell output in the West, Bloomberg reported. 

Meanwhile, the company also said it is looking at generating its own energy, due to the cost of rising prices associated with the Russia/Ukraine conflict and global inflation. “We have significant areas where we could put solar panels,” Tavares commented. 

Authored by Tsvetana Paraskova via OilPrice.com,

• For the first time in history, U.S. LNG overtakes Russian piped gas in EU.

• IEA: The drop in Russian supply calls for efforts to reduce EU demand to prepare for a tough winter.

• In April 2022 alone, five European countries – France, Spain, the UK, the Netherlands, and Poland – accounted for 54.1% of total U.S. LNG exports.

For the first time ever, the European Union has imported in June more liquefied natural gas (LNG) from the United States than gas via pipeline from Russia, as Moscow slashed supply to Europe earlier this month, Fatih Birol, Executive Director of the International Energy Agency (IEA), said on Thursday.

“Russia’s recent steep cuts in natural gas flows to the EU mean this is the 1st month in history in which the EU has imported more gas via LNG from the US than via pipeline from Russia,” Birol tweeted today, sharing an analysis from the IEA.

“The drop in Russian supply calls for efforts to reduce EU demand to prepare for a tough winter,” the head of the Paris-based agency added.

The significantly lower supply from Russia since the middle of June and the upcoming annual maintenance at Nord Stream that will completely halt deliveries through the pipeline for two weeks in July have left Europe scrambling to fill gas storage sites to adequate levels before the winter. 

The EU has been importing record volumes of American LNG in recent months, although analysts say LNG imports alone cannot replace Russian pipeline gas.

The European Union and the UK saw a record high level of LNG imports in April, as higher spot prices in Europe compared to Asia attracted suppliers with destination flexibility to ship LNG to Europe. Those suppliers were mostly from the United States, the EIA said earlier this month. 

In April 2022 alone, five European countries—France, Spain, the UK, the Netherlands, and Poland—accounted for 54.1% of total U.S. LNG exports, data from the U.S. Energy Department showed earlier this month.  

Despite the record intake of American, and other, LNG, Europe still faces supply troubles this winter if it doesn’t take measures to conserve energy, analysts and the IEA say.

Europe faces a “red alert” for gas supply next winter, Birol said earlier in June.

“Recent disruptions to natural gas supplies, notably Russia steeply cutting flows to EU countries, is set to remove around 35 billion cubic metres of gas from the market this year, posing big challenges to efforts to refill storage. This is a red alert for the EU for next winter, Birol tweeted in mid-June.

During his Thursday news conference at the Madrid NATO summit, President Biden announced yet more Ukraine security aid – this time to the tune of $800 million in the next round of security assistance. But what stood out compared to prior announcements of aid is that this includes some “offensive” weapons, in addition to air defense systems, which is a significant upgrade in terms of heavier and more sophisticated hardware compared to things like Javelin anti-tank missiles given early in the conflict (and prior to it).

Biden stressed in his remarks at the end of the two-day NATO summit, “Putin thought he could break the transatlantic alliance. He tried to weaken us. He expected our resolve to fracture. But he’s getting exactly what he did not want.”

According to The Hill some of the weapons he listed off were identified as “more counter-battery radars, artillery and ammunition, including ammunition for High Mobility Artillery Rocket Systems (HIMARS) that the U.S. has recently supplied to the Ukrainians. Biden also predicted that other countries would send HIMARS to Ukraine.”

Up to this point, the US administration has carefully focused its rhetoric on declaring that only “defense” weapons are being supplied, thus it’s hugely significant that Biden has begun admitting “offensive” weapons are included as well, perhaps as part of messaging aimed at Putin saying Washington is ready to stay the course in backing Ukraine even as it’s clear Ukrainian forces are being beaten back in the Donbas. Biden said:

They need — we’re going to be providing another — well, I guess I’ll announce it shortly, but another $800 billion — $800 million in aid for additional weaponry, including — you know, weapons, including air defense system, as well as offensive weapons.  I have a whole list I’d be happy to give to you.  But that’s the next tranche that’s going to occur.

National security adviser Jake Sullivan earlier this week mentioned medium and long-rage anti-air systems, but didn’t specify just which ones would be transferred to the Ukrainians. Previously the White House expressed a desire to avoid sending weapons with ranges capable of striking inside Russia, but it’s no longer clear if this remains a guiding policy at this point.

The day prior, on Wednesday, the UK too announced it will be providing Kiev with another one billion pounds in military aid. This has been described as to include “air defense systems, uncrewed aerial vehicles, new electronic warfare equipment and thousands of pieces of equipment for Ukrainian soldiers.”

Prime Minister Boris Johnson, who has been outspoken in encouraging Ukraine’s president Zelensky to at no time offer any territorial concessions for the sake of peace, said in unveiling the new aid, “UK weapons, equipment and training are transforming Ukraine’s defenses against this onslaught. And we will continue to stand squarely behind the Ukrainian people to ensure Putin fails in Ukraine.”

Previously, Ukrainian military commanders have suggested the additional weapons are “too little, too late” in making a decisive difference in the tide of war for the Donbas, but they appear to be setting in for the reality of a long haul, grinding fight for the country.