Good morning! It is a good one and the sun is bright and pain is starting to diminish. The rain has stopped in Virginia’s Piedmont, and something like recovery continues to happen here at Refuge Farm. I won’t go into that end of things, since it is just what it is. But some general steps toward restoring general order were accomplished yesterday. It was a tonic, being the first such effort in weeks and weeks of the personal health emergency.
In trying to bring order from the ordinary, events above the world stage herald Black Swans soaring above a troubled plain.
There is generational change in progress that is both not new and quite natural. I like the evolution of the old Bob Peck Chevrolet showroom I first saw when moving to DC in 1986 with a new family. It was old then, a piece of 1950s functional art as practical as the tail-fins on the cars of the day. It was a statement then, and transformed by years into a new statement today. The change represents something we have seen in Boomer times now two or three times.
Nothing scary, just a natural progression. This season, though, that change is laid atop a dramatic social development as profound as the impact of the freedom provided by the cars Bob Peck’s young salesmen hawked below their dramatic facade. In the last few decades, we have become minor digital cyborgs with our digital devices. This morning we saw a proposal that children should have chips implanted in their growing flesh, or have the flesh itself excised in the interest of some strange new concept of sexuality. Along with that sort of thing as ordinary conversation come the products of public policy based on an entirely new concept of supply and demand that no one can logically explain.
We have discussed most of the basic issues here in The Daily, so there are no particular surprises in how they are developing. But the number of them is startling even as the orientation of the flight of darks birds changes. The global economy is in largely self-inflicted crisis. The EU is sliding into recession with runaway inflation and the return of hunger and the cold of Northern winter. Parts of China have shut down factories due to the drought causing power shortages where hydro power was reliable. That means more supply shortages and spreading economic disruption.
There is no major economy anywhere that is doing well. Most seem to be headed to recession as the year goes on. Inflation is getting worse in many places, and will continue to do so as oil and gas rise again. We are imperiled by drought and flood, both pushing food commodity prices higher.
The only reason oil prices are slightly lower now is demand destruction. The result is, between the anti-fossil politics, and demand destruction, no major oil company in the world is spending big on new drilling. That means oil prices will surge again as economies recover (eventually) without necessary resupply. Our strategic oil reserve has been squandered on short term tactical goals, and will leave us without backup should global demand rise again. We even sold our strategic reserve- and shipped it- to our number one economic competitor China.
It is foolishness of an astonishing level. Europe’s colossal investment in “renewable” energy is a classic example. Remember, it may cost more energy to produce windmills and batteries than can be recovered by their operations. It has left Germany dependent on Russia for natural gas, and Putin has just cut exports to 40% of what had been planned.
Ukraine? The Russians have been stopped, and their army and weapons are being blown up. There may be 80 to 120 thousand killed and wounded, and some units are reported to be declining orders to fight. The mercenary Wagner Group is recruiting in prisons for combat soldiers, so you can imagine who they are going to get. 20,000 Russian soldiers are trapped in Kherson behind Ukrainian lines and will eventually either be killed or forced to surrender. Despite some success around U.S. sanctions, Putin’s economy may be sliding into a major recession. given the situation in China, and supply chain issues, it could be something like the 1929 global economic collapse.
China has an election coming up, so like the United States, much is happening that cannot be actionable until the political future is known. So, there are some Black Swans wheeling about. What does that say about the days to come? There will be the usual political hysterics here with our election, and the October Surprise we have come to accept. Ukraine could cause an abrupt shift that could involve the collapse of large nuclear facilities. Taiwan and the Western Pacific could lurch into conflict even as we wrestle with our electoral results.
So, given that emotion and health are only still returning, day by day, we will take them as they come. But we are going to be more watchful than normal, to see what develops as one or more of the Swans decides to land. It will be historic, and it is good to be along for the ride!
Copyright 2022 Vic Socotra
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