alan2102
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Good news!
https://www.forbes.com/sites/jeffmcmahon/2019/07/01/new-solar–battery-price-crushes-fossil-fuels-buries-nuclear/#425918e55971
Jul 1, 2019, 12:03am
New Solar + Battery Price Crushes Fossil Fuels, Buries Nuclear
Jeff McMahon
Los Angeles Power and Water officials have struck a deal on the largest and cheapest solar + battery-storage project in the world, at prices that leave fossil fuels in the dust and may relegate nuclear power to the dustbin…. It’s half the estimated cost of power from a new natural gas plant…. Mark Z. Jacobson, the Stanford professor who developed roadmaps for transitioning 139 countries to 100 percent renewables, hailed the development on Twitter Friday, saying, “Goodnight #naturalgas, goodnight #coal, goodnight #nuclear.”Still more FUN doses of reality!
Excellent presentation here by Tony Seba, April 2018. Don’t miss the latter portion, starting around 55:00: collapse of demand for new vehicles, and collapse of oil industry, starting ~2020; large decline of CO2 emissions and energy requirements due to runaway electric autonomous vehicle adoption, starting ~2020. Wow!
Clean Disruption of Energy and Transportation – CWA –
Boulder, April 9, 2018
Tony Seba
Published on Apr 25, 2018Also, don’t miss the passage after 1:03:00 on solar power: an onrushing locomotive.
Nice new presentations by Ramez Naam and Martin Katusa.
Renewables are a freight train that cannot be stopped.
‘Is the Electric Vehicle Revolution Real?’ with Marin Katusa of Katusa Research
[mistitled; it is about renewables in general]
Cambridge House
Published on Dec 20, 2017
Exponential Energy | Ramez Naam | SingularityU South Africa
Singularity University Summits
Published on Oct 20, 2017
Wonderful news: at 16:40 — “In January, China canceled 104
planned coal power plants, including 40 for which ground had
already been broken… in one month India canceled 14GW of
planned coal capacity, because solar PV price is in freefall.
THE WORLD’S COAL PIPELINE IS DRYING UP”. Thank God!Still further doses of reality:
Renewables have WON. The debate is OVER. Officially.
https://www.worldnuclearreport.org/The-World-Nuclear-Industry-Status-Report-2017-HTML.html
The World Nuclear Industry Status Report 2017 (HTML)
Tuesday 12 September 2017
Foreword by S. David Freeman
[snip]
“[T]his 2017 World Nuclear Industry Status Report is perhaps the most decisive document in the history of nuclear power. The report makes clear, in telling detail, that the debate is over. Nuclear power has been eclipsed by the sun and the wind. These renewable, free-fuel sources are no longer a dream or a projection — they are a reality that are replacing nuclear as the preferred choice for new power plants worldwide.
[snip]
The value of this report is that this conclusion no longer relies on hope or opinion but is what is actually happening. In country after country the facts are the same. Nuclear power is far from dead but it is in decline and renewable energy is growing by leaps and bounds…. nowhere in the world, where there is a competitive market for electricity, has even one single nuclear power plant been initiated. Only where the government or the consumer takes the risks of cost overruns and delays is nuclear power even being considered…. since 1997, worldwide, renewable energy has produced four times as many new kilowatt-hours of electricity than nuclear power. Maybe the Revolution has not been televised, but it is well underway.
Renewable energy is a lower cost and cleaner, safer alternative to fossil fuels [and] nuclear power. The world no longer needs to build nuclear power plants to avoid climate change and certainly not to save money. If you have any doubt about that fact please read the World Nuclear Industry Status Report 2017.”And, the U.S. is not doing shabbily, either. DOUBLING in ONE YEAR:
https://www.greentechmedia.com/articles/read/us-solar-market-grows-95-in-2016-smashes-records
US Solar Market Grows 95% in 2016, Smashes Records
by Mike Munsell
February 15, 2017
In its biggest year to date, the United States solar market nearly doubled its annual record, topping out at 14,626 megawatts of solar PV installed in 2016.
This represents a 95 percent increase over the previous record of 7,493 megawatts installed in 2015.…………………………….
what does this graph tell us?
… it tells us that the storm is gathering great momentum. The pattern of ~30% annual increases (very fast, and laudable) of the 2011-2015 interval has been smashed to the upside.
Nice!
Cheap, high-EROI renewables are a tsunami that cannot be stopped — as I wrote here years ago.
And, a year old, but worth a review:
https://www.greentechmedia.com/articles/read/the-solar-singularity-is-getting-closer
The Solar Singularity Is Getting Closer
by Tam Hunt
January 06, 2016
One year ago, I wrote a piece here at GTM that argued the solar singularity is nigh. The “solar singularity” is the point where solar becomes so cheap in a majority of countries around the world that it is established as the default new power source. At this point, solar will very likely go vertical in its growth curve.
snip
My key assertion is that under current cost trends for solar and wind power, and (less certainly) for other renewables and electric vehicles, we are well on our way down a path to dramatically reduced emissions.
snip
I made the solar singularity concept the centerpiece of my 2015 book, Solar: Why Our Energy Future Is So Bright. I offer here an update on the topics covered in my book, showing that we are perhaps even closer to the solar singularity than I previously dared to suggest.
I’ll cover not only solar, but also battery storage, electric vehicles and automated driving, which are the parallel and intertwined revolutions that are set to transform our energy system worldwide. With these four technologies developing steadily, we can reasonably expect to see, by 2035 to 2040, a world powered predominantly with renewable electricity — not only for homes and businesses, but also for transportation and industrial processes.And, on the China front:
https://thinkprogress.org/with-millions-of-jobs-up-for-grabs-china-seizes-clean-tech-leadership-from-u-s-a37154d02d0#.h73ri6svf
Feb 28, 2017
China smashes solar energy records, as coal use and CO2 emissions fall once again
We are witnessing a historic passing of the baton of global leadership on technology and climate from the United States to China.
snip
Beijing plans to invest a stunning $360 billion by 2020 in renewable generation alone…. In 2016, Chinese coal consumption fell for the third consecutive year, Beijing reports, while it installed almost twice as many solar panels as it had in 2015, which was also a record-setting year. Beijing projects both trends will continue in 2017. China’s solar installation target for 2020 is likely to be achieved in 2018, which as Greenpeace’s Energy Desk noted in January, is “a pretty impressive feat given that the target was set only a couple of months ago.”The German energy transition, four years along; report card:
https://www.gtai.de/GTAI/Navigation/EN/Meta/Press/press-releases,t=germanys-energy-transition-progresses,did=1598022.html
Dec 14, 2016
Germany’s energy transition progresses
Berlin (gtai) – The annual report on Germany’s Energiewende (energy transition) has given the process full marks for its progress in 2015. Most notably, renewable energy sources became Germany’s most important source of electricity, with a share of 31.6 percent, even allowing for a slight increase in energy consumption (an increase largely attributed to cooler overall weather).
Even more pleasing was the overall fall in energy bills, by 1.4 percent for households and 2.1 percent for industrial customers not eligible for tax relief on their energy usage.
Minister for Economic Affairs and Energy Sigmar Gabriel was delighted with the scorecard, saying it confrimed a ‘near complete implementation’ of an ‘ambitious programme’.……………….
Nice!
Ilargi:
“Chinese consumers [are] not consuming… No consumer based society is in sight.”
China’s middle class emerging as the world’s consumption engine; will be over half of all online shopping by 2018
Before the late 1990s China barely had a middle class. In 2000, 5 million households made between $11,500 and $43,000 (annual income of 75,000-280,000 yuan) a year in current dollars; today 225 million do. By 2020 the ranks of the Chinese middle class may well outnumber Europeans (50 million more households should become middle class).The deflationary crisis and stock market collapse continues!
https://www.google.com/search?q=djia&ie=utf-8&oe=utf-8
[as of 14 July 2016: DJIA at 18,500+ — an all-time high]Ilargi: “our highly complex economic systems cannot run on renewables (for one thing, the EROEI is not nearly good enough)”
The EROEI is plenty good enough. The idea that it isn’t is a relic from the golden age (?) of dieoff.com/peak-oil-doomerism, circa 1998-2008, based on data from the 1990s. The latest data shows excellent and steadily-improving EROEI, with no end in sight. Since renewables installation is largely a one-off affair (with small or negligible maintenance costs, averaged over decades), EROEI will continue climbing, probably to reach fantastic heights. But regardless: the EROEI situation right now, today, is compelling, even without further improvement.
I explained this to Chris Martenson some time back; here:
https://www.peakprosperity.com/comment/176009#comment-176009Martenson — generally a smart guy — has the same problem: he got most of his info on renewables from old dieoff-type literature; this info is now hopelessly dated and useless. Actually, even the info that I posted at that link (above) is already somewhat dated: I posted it 1.5 years ago; it is based on studies at least 3 years old now. The situation is dynamic and EROEI keeps getting better.
Please don’t mistake what I just said as being the equivalent of “we can all relax now because renewables will solve all our problems, such as climate change”. That is NOT what I said. I said what I said. See above. Thank you.
Ilargi: “For Mussolini, fascism was much more about … letting corporations write, define and perhaps even execute a country’s economic policies”
This is a common misconception, but it ignores what the original fascists meant by “corporativism” and “the corporate state”. They were not referring to corporations — i.e. businesses, or legal/commercial entities. They were referring to a conception of the totalitarian state AS a “corporation”, or a whole, undivided body. Think the word “corpse” in the sense of referring to a whole body; corpse, corpora, corporation; unity; a whole body. As Mussolini put it so pithily: “all within the state, nothing outside the state, nothing above the state”. And “the state” referred to everything: the corporations or big businesses, the small businesses (and shopkeepers, and middle class), the workers and trade unionists, the peasants, the military, the teachers, EVERYTHING, EVERYONE. That was the fascist “corporativist” conception, intended to embrace everything, not merely to enthrone one class, or one set of institutions (e.g. corporations), above all else. I’m making no claim about the success of fascism in achieving this; I’m talking about what the fascists meant by the words. Also, this matter of corporativism is not all there was about fascism, just one prominent aspect.
As for the “fascism” of the major candidates and public figures: Trump is a sort of rhetorical fascist, what with his ultranationalism (building walls, excluding “others”, etc.) and rising-from-the-ashes (“make america great again”) imagery. But the actual policies and preferences that he seems to favor do not correspond well to fascism; for example he is much more circumspect about military adventurism and imperial/empire-type policies than his competition, even including Bernie Sanders.
Meanwhile, Hillary is much more of a substantive fascist than a rhetorical one. Rhetorically, she sounds vaguely progressive; but substantively — with respect to actual policy preferences and implementations that could be said to be consistent with fascist inclination — she is a real fascist, or borderline one.
In other words: Trump sometimes SOUNDS like a fascist, but doesn’t really seem to be much of one, while HRC SOUNDS like a progressive, but in actuality is at least quasi-fascist.
Raul: “two days after I flew from Athens to Amsterdam mid-March, I got myself a -for lack of a better term- nasty injury. And I have no idea where it came from. Crampy seat on the plane? There’s a link to earlier hip issues, I know that, but this was (is) severe.
What happened was the IT (ilio-tibial) band in my left leg (ligament on outside of thigh, runs down from hip to shin/ankle) seized up pretty much entirely; muscle contraction squared -or cubed-. All of a sudden, I couldn’t stand up straight any longer, nor could I walk other than in a hunched Quasimodo way and just for a few feet, and because when muscles contract in this fashion they get extremely painful, 24/7, lying down hurt a lot too, and I therefore basically didn’t sleep for weeks”Right. I have had extensive experience with a near-identical problem. The main difference being that my episodes have been much shorter — like a day or three each. Episodes have been precipitated by long plane flights, being jammed awkwardly into the seat for hours.
There’s a solution that is cheap and easy. Your primary problem is MUSCLE SPASM; as you say, you have “muscle contraction squared, or cubed”. Right. Spasm. You need drugs which release the spasm, called muscle relaxants. The one I’ve used, which is highly effective, is called cyclobenzaprine (trade name “flexaril”). There are several others, and they probably all work comparably well, but I’m sticking with this one which I’ve used repeatedly with brilliant success. All the spasm, or at least 90% of it, and with it the pain, goes away inside of an hour, like a miracle. And that for a pill that costs, generically, only a few cents, and is harmless (no serious side effects)!
If you’re really in terrible shape you might need an analgesic in addition, like tramadol or codeine. Forget diclofenac and NSAIDS; they are worthless for this. (I’ve tried.) But if you relieve the spasm you probably will need minimal or no analgesia. You also don’t need exotic myofascial release therapy or the like; not that I am against those things, only that I know what works spectacularly well, and it is cheap and harmless and easy.
You write that “the family doctor had no idea what pain I was talking about and prescribed a useless generic painkiller (Dyclofenac).” Either the doctor is an idiot, who does not recognize the appropriate treatment for muscle spasm, OR you failed to specify fully what was going on — perhaps emphasizing the pain and barely mentioning the spasm.
Regardless, get cyclobenzaprine, right away, and never run out of it. I take it with me wherever I go. I would never leave town without a few tabs in hand — each one offering blessed relief from hours of torture, in the event of one of those episodes.
God bless you, and good luck.
Cory/Ann: Thanks for your post, and your support. I well remember the old blog days. I remember being so rash and intemperate as to post a few critical remarks — which were immediately shouted-down by several voices. Whatever happened to all those people? Did they get tired of waiting for the zombie apocalypse, and drifted away? This is what happens to neomalthusian/doomer cults, it seems. Remember the peak oil community? Once robust and growing; now smashed and irrelevant. Of course that is not to say that peak oil is not an ultimate geological reality; it is. But the peak oil community was energized not by geological facts, but by wild extrapolations FROM some geological facts, unaccompanied by due caution on account of the fact that facts change (can you say “dramatic advances in horizontal drilling”, or “price of renewables collapsing to and below grid parity”?). I am as aware of these problems as anyone, having been part of that PO community at one time, now long ago. About the time TAE was getting rolling (2006? 2007?) I was beginning to have my first doubts about the dogmas — peak oil (as though it were clearly predictable), “carrying capacity” (as though it were something fixed!), “overpopulation” (i.e. its ugly and monstrous Malthusian associations), the likelihood of catastrophic collapse, and so on. It has been a long, interesting intellectual journey. The reason I show up now and then at TAE, DD, etc., is to help others (silent lurkers) up the same learning-curve that I’ve traversed. Almost like my duty. 🙂
After 45 minutes of extremely frustrating attempts and re-attempts to post the foregoing 3-part message, I finally realized that there was something about that last link (inpraiseofchina) that the TAE software did not like, causing it to discard my whole post. Only by adding extra spaces was I able to get it to post. The spaces must of course be removed in order for the link to work.
Nicole: “Granted the Chinese are capable of building beautiful and durable things, but that’s not what they do when they build ghost cities. Those will never fill up. No one will be able to afford them.”
Nicole, there are no “ghost cities”. That was a creation of a highly-biased Western press. There are largely-empty cities which are filling up. Many of them HAVE filled up. This is documented fact. The demand is enormous. From your remarks on this I conclude that you’ve not looked into the matter at all, and instead are reflecting an impression from the numerous lurid tabloid-type scary-headlined stories that appear in the Western media.
Nicole: “Just look at overbuilt Japanese bubble infrastructure. It’s already falling down after 25 years (their bubble peaked in 1989).”
What are you talking about? Japan has invested heavily — and wisely — in infrastructure upgrades for the past couple decades. This was a very good investment. It is not “falling down”! On the contrary, it is beautiful, durable and functional. As I said up thread, what’s falling down, or at serious risk, is OUR (U.S.) infrastructure, not theirs!
As for your concerns about Chinese debt, you might want to broaden your reading and thinking. Start here:
inpraiseofchina . com /2015/09/chinas-debt-is-exaggerated.html
September 2015
China’s Debt is Exaggerated…continued from last:
You’re probably a Maoist at heart, Nicole, and I am more with you than against you in that. I agree that China in the Mao era was laudably for and (to an extent) BY the peasantry; rural life improved tremendously. That should have been continued, rather than forsaking it to go on the urban hyper-development path on which they went. Surely some sort of hybrid development path would have made much more sense.
I would further agree that the whole world should have had a communist revolution in the early part of the 20th century. Society should have reorganized itself along socialistic lines, following sane programs of conservative, environmentally-sensitive development. None of the wars and injustices and outrages of the intervening decades should have happened. And so on.
I deeply wish that all that were true. But it is NOT true. What happened DID happen. And here we are. We have to come to terms with it.
Barring global communist (or other capitalism-transforming) revolution, things are as they are. The reality for a great many people is that the city offers much more opportunity and advantage than the countryside and villages. In the context of things as they are, rather than as we would wish them to be, urbanization is good. Further, even if I were to imagine that the world is as we wish it to be, there are still numerous things about urban life that are highly attractive and beneficial. Just the cultural and intellectual stimulation alone is huge, and unmatchable in a rural village. In an ideal world, the city would continue to have great attractions, however much the rural situation had improved, just because the concentrated nature of the city makes a world of options possible that could not exist in a low-density environment.
Nicole: “comprehensively destroying the environment upon which they all depend”
China’s environmental problems are grave. But their remedial efforts are also heroic and ongoing — and greatly exceed any remediation of similar environmental problems at comparable points in our (U.S.) development. Everything must be viewed in perspective. And, it is difficult to view this issue in perspective because of the biased, anti-China/anti-Eurasian orientation of most of our information sources.
Nicole: “Granted the Chinese are capable of building beautiful and durable things, but that’s not what they do when they build ghost cities. Those will never fill up. No one will be able to afford them.”
Nicole: “temporarily lifted out of poverty”
“Temporary” has been decades, so far. We’ll see.
Nicole: “at the expense of crowding them into megacities and depriving them of their connection to the means to provide for themselves”
I have some sympathy for this point of view. Urbanization is a complex phenomenon with both bright sides and dark sides. I’ve so far been incompletely convinced by the portrayals of both sides (those celebrating urbanization, and those denouncing it). They both have good points.
The case FOR urbanization is made well by Stewart Brand — a guy about whom I have grave misgivings, but nevertheless he does make good points about the practical reality that exists today:
youtube.com/watch?v=OvHjQdc3oNo
What squatter cities can teach us | Stewart BrandIn a nutshell, per Brand (with a few of my additions):
Life in the country:
– dull, backbreaking, impoverished, restricted, exposed, dangerous, static [plus: disease, short life expectancy, illiteracy, no/fewer rights for women, etc. –alan2102]Life in the city:
– exciting, less grueling, better paid, free, private, safe, upwardly mobile [plus: education, health care, wide variety of services options, cultural options and diversity, hugely improved sexual/intimacy options, intellectual stimulation, etc. –alan2102]The other side is of course the imperialistic *aspects* of urbanization, and the way in which it reflects social injustices (land grabs, etc., even going back to the enclosures). For this point of view, in sharp counterpoint to Brand and his ilk, by a staunch Maoist, including a rousing defense of Mao’s communism and the revolution’s accomplishments, see here:
https://revcom.us/a/320/nicholas-kristofs-ode-to-imperialism-what-kind-of-world-is-he-celebrating-en.htmlcontinued, next post…
Ilargi: “Greer destructs renewables quite well.”
No, he does not do any such thing. Most of the article is not even about modern renewables. And when he does get around to renewables, there’s no substance, just a few ignorant factoids; e.g. solar’s “dismal net energy returns” (the opposite is true — VERY true — and it is a major driving force of the shift). He misses the most fundamental lesson of the last 5-10 years: renewables are succeeding, massively, not in spite of low EROEI or poor economics, but BECAUSE OF HIGH EROEI AND GREAT ECONOMICS, which get better by the year, as fossil fuels become worse and worse.
He also makes numerous wild claims, inconsistent with reality (e.g. “soaring” cancer rates near solar panel factories).
The guy has obviously not done his homework. But then, I don’t expect him to. He is in too deep with his “collapse of modernity” idea. He MUST ignorantly deny, because there is no face-saving way out for him. He had bought heavily into the peak oil collapse/apocalypse story (I remember his posts on energyresources and elsewhere, early 2000s), and maybe still does; he might be in denial on that one just like the rest of the peak oil crowd.
Poor guy. So intelligent, yet…
Oh yes, he also makes some very good points and observations, e.g. “the point that nearly everyone in the debate is trying to evade is that the collection of extravagant energy-wasting habits that pass for a normal middle class lifestyle these days”. Yo.
Seychelles: the problem with “[rural] living in relative harmony and more directly connected with nature” is that it has, historically, come freighted with chronic poverty, chronic malnutrition, chronic infection and infestation, and low life-expectancy. That was the condition of the Chinese peasantry at the time of the revolution. Maybe it is possible to correct those problems without mass urbanization. I’m inclined to agree that things should have been done differently. Mao was more insistent on supporting and empowering the peasants right where they were, than his successors. He was probably right. But so much has happened since then, both good and bad, that it is futile to go back and play “what if” (they had done things the way I think they should have). They did what they did, and it has been fabulously successful in many ways. As I said, the huge decline in the rate of poverty, globally, is largely due to the vast improvements for the majority in China. That is a spectacular accomplishment. Would some of those people have been better off back on the farm? Maybe. Somewhat. I don’t know. A great many of them would not be better off because they would have DIED; many others would have remained desperately impoverished for a long time. Longer than with the urbanization? Hard to say. Answering such questions would require true scholarship for a period of many months, studying the whole of modern China. I’m not really up to it, and I doubt if anyone else in attendance here is, either.
“most of the new construction will have limited longevity”
Go read about their cities. Look at pictures. Get some idea what you are talking about. Their buildings are not falling down. Their infrastructure is in great shape, and getting better every year (while ours crumbles). They have the largest, most beautiful and efficient airports, train stations, and other public facilities of anywhere on the planet. None of these things are falling down. They function just fine. Vague fears about “limited longevity” have no basis in fact, unless you are talking about the alarmingly deteriorating infrastructure situation in the U.S. That’s the “limited longevity” that you should be thinking about.
Nicole: vis:
Still more doses of reality:
Jon Porritt, post-Paris: “the renewables revolution is now unstoppable”
Naomi Oreskes: neo-denialists hype nukes, disparage renewableshttps://www.jonathonporritt.com/blog/post-paris-scene-part-3-renewables-industry-festive-mood
snip
“The statistics speak for themselves. Renewable energy as a whole (electricity, heating and liquid fuels) has grown 85% over the last ten years – and now provides 30% of all installed power capacity. Investment in 2014 was $270bn – up from just over $50bn ten years ago. And 2015 is looking even better. And all that was before the Paris Agreement…. there was not one person at this year’s Summit who would contest today’s post-Paris reality: that the renewables revolution is now unstoppable, and that it could all go a great deal faster, everywhere in the world, than many of today’s mainstream pundits would seem to believe. (They clearly haven’t learned enough – if anything, from their erstwhile forecasting errors ten years ago!)”………………………..
https://www.theguardian.com/commentisfree/2015/dec/16/new-form-climate-denialism-dont-celebrate-yet-cop-21
There is a new form of climate denialism to look out for – so don’t celebrate yet
Naomi Oreskes
At the exact moment in which we need to reduce our reliance on fossil fuel, we’re being told that renewable sources can’t meet our energy needs
Wednesday 16 December 2015
snip
“There is…a new, strange form of denial that has appeared on the landscape of late, one that says that renewable sources can’t meet our energy needs. Oddly, some of these voices include climate scientists, who insist that we must now turn to wholesale expansion of nuclear power…. we probably won’t get very far if the alternatives to fossil fuel – such as renewable energy – are disparaged by a new generation of myths. If we want to see real solutions implemented, we need to be on the lookout for this new form of denial…. The key to decarbonizing our economy is to build a new energy system that does not rely on carbon-based fuels. Scientific studies show that that can be done, it can be done soon and it does not require nuclear power.”Nicole: “Alan, China didn’t do what needed to be done, they did what the elite who run the state owned enterprises could most profit from”
Both. It was both what needed to be done (roughly speaking) AND what elites could profit from. To see only the latter is to adopt a cynical and unrealistic attitude — which is unfortunately the norm at TAE. It is that attitude that sees ONLY debts or liabilities, NEVER assets. It is a terribly skewed way to view the world, and it dooms much of your analysis to be wrong for decades to come.
“even if it proved to be a massive exercise in negative added value, which it did for the most part.”
What “negative added value” are you talking about?
“This was a grotesque waste of perfectly good resources to build useless infrastructure there was no demand for, and no use for, probably ever in its lifetime.”
Nicole, this assertion of yours is wildly out of touch with reality. China is a rapidly urbanizing nation and it requires vast new infrastructure to allow this urbanization. There is HUGE demand and use for the infrastructure they’ve built. The whole “ghost cities” story is rubbish. The “ghost cities”, after a decade or so, FILL UP. The buildings, roads, airports, dams, rail lines, and much more, across the country, are filled with people and activity. It is a rapidly-growing, vibrant civilization. How you and Ilargi can remain blind to this is a mystery to me.
“Remember that bubble infrastructure is typically badly built as quickly as possible, in order to profit and move on to the next project. That stuff would be raining down concrete blocks (riddled with concrete cancer in 2 or 3 decades) on to the heads of those beneath, if there were any heads beneath.”
More wild assertions based on nothing. The Chinese have become experts at building things fast, it is true. And corners get cut, which on rare occasion results in a headline-grabbing collapse or failure. But for every collapse or failure, there are a THOUSAND structures standing and giving good service to the throngs of people who live and work in them. The evidence for this is as follows: Guangzhou, Shenzhen, Dongguan, Chengdu, Shenyang, Hangzhou, Chongqing, Wuhan, and dozens of others.
Here, take a look:
https://www.google.com/search?biw=833&bih=490&tbm=isch&sa=1&q=china+cities&oq=china+cities“This is nothing more than the largest waste of resources in human history, all fueled with bad debt for the benefit of the very few at the expense of the many.”
Tell that to the billion or so who have been lifted out of poverty! The global poverty rate has fallen off a cliff over the last 25 years, and most of the gains were in China. The world still has a huge inequality problem, and a huge waste problem, but the nature and specifics of it have changed dramatically.
I have numerous misgivings about the way in which China has developed itself. But no way would I disparage what they’ve done as “the largest waste of resources in history”! The opposite is closer to the truth. It is the largest good use of resources in history — albeit with too much waste, which could have and should have been prevented.
“It’s happened many times before, but never on this scale. It couldn’t have without cheap energy. Since we’ll never have cheap energy like this again, it’ll never happen again, thankfully.”
“Thankfully”?! You mean it is a bad thing for the world to develop itself and raise its population out of poverty? Surely you are not serious.
And don’t look now, but cheap renewable energy is coming on like gangbusters, and nothing can stop it. THANKFULLY. Within this decade, it will no longer make economic sense to build anything BUT renewable capacity. Renewables already make up a large proportion of new capacity, and this is so because of the compelling economics. Renewables are beating fossil fuels and nukes even WITH the huge FF/nuke subsidies intact.
regionswork: “Did the Chinese play us…to get the gold and infrastructure for another 1000 years? Are they getting even for the Opium Wars and related colonization?”
Yes and yes. The SOBs outsmarted and outworked us. Their debt problems are MUCH less important than Ilargi would claim, for the exact reasons that you site: gold, and infrastructure. They have huge debts, BUT THEY HAVE MORE-HUGE ASSETS. That used to be the case with us, too, a few decades ago. My how time flies.
Ilargi: “Makes us wonder all the time what people thought when they saw China used as much cement in 2011-2013 as the US did in the entire 20th century. Did anyone think that would continue for decades, even grow perhaps?”
No, of course no one thought that. Why would anyone think that? Who would need to continue to pour that much concrete, decade after decade? NO ONE. Because concrete lasts a long time. You pour it once, and it lasts a half-century or full century, perhaps longer. The Chinese are buidling a modern civilization. That requires a f**k-ton of concrete. But it is a one-off thing, largely.
“How much cement or steel can one country need, even if it’s that large?”
ENOUGH TO FORM THE PHYSICAL INFRASTRUCTURE OF A MODERN CIVILIZATION FOR 1.4 BILLION PEOPLE, similar to the physical infrastructure of a modern civilization for ~300 million people that now exists in the U.S. And once it is laid down, it lasts for a loooooong time, as you can see by sticking your head out the door and looking up and down the street.
They did what needed to be done, albeit with warts/mistakes along the way. Surely there would have been no mistakes if you, Raul, had been president of the PRC. Too bad that opportunity was missed.
I don’t have time to critique this one, though I could.
This will have to pinch-hit:
So much China pessimism, so little time!
“China has given the green light to more than 150 coal power plants so far this year despite falling coal consumption, flatlining production and existing overcapacity.” — greenpeace blog, quoted above.
Technically correct, but it ignores context. Yes, many new coal power plants are being built — and many are being SHUT DOWN. The ones being shut down are older, inefficient and highly polluting. The ones being built are much better, albeit not faultless. China is transitioning to renewables and nuclear as fast as it can, but coal is still (and will remain, for at least 50 years) an important part of the mix. That being the case, what is to be done right now, for the couple decades? Answer: build MUCH BETTER newer coal plants (higher efficiency, with air quality control systems) and shut down the awful old ones. This is a good and appropriate investment, for the time being. However, within as little as a decade, the economics of renewables will make it foolish to construct any more fossil fuel-dependent infrastructure. When that moment arrives, coal will finally begin its long descent into well-deserved oblivion. China will likely lead the way in the conversion.
PS: China is not “falling”. It is entering its period of economic maturity, i.e. the wild young growth years are over. This will continue for a half-century or so. Likely growth: 6-7% per year, next decade or two.
……………………….
https://www.bloomberg.com/news/articles/2015-04-19/here-s-what-china-closing-coal-power-plants-means-for-emissions
Here’s What China Closing Coal-Power Plants Means for Emissions — April 19, 2015
snip
The [coal plant] closures are part of China’s plans to close as much as 20 gigawatts of capacity that doesn’t meet environmental standards in the five years ending in December. China has already shut 18 gigawatts, according to Greenpeace…. China is expected to close another 60 gigawatts with facilities that are more efficient between 2016 to 2020, though three times as many plants are scheduled to be built using newer technology, BNEF’s Lu said. New plants will produce about 90 percent fewer pollutants such as dust and sulfur dioxide per kilowatt-hour of electricity generated, she said.RENEWABLE ENERGY: yet another dose of reality…
https://www.bloomberg.com/news/articles/2015-10-06/solar-wind-reach-a-big-renewables-turning-point-bnef
Solar and Wind Just Passed Another Big Turning Point
It has never made less sense to build fossil fuel power plants.
Tom Randall
October 6, 2015 — 5:00 AM CDT
snip
For the first time, widespread adoption of renewables is effectively lowering the capacity factor for fossil fuels. That’s because once a solar or wind project is built, the marginal cost of the electricity it produces is pretty much zero—free electricity—while coal and gas plants require more fuel for every new watt produced. If you’re a power company with a choice, you choose the free stuff every time.
It’s a self-reinforcing cycle. As more renewables are installed, coal and natural gas plants are used less. As coal and gas are used less, the cost of using them to generate electricity goes up. As the cost of coal and gas power rises, more renewables will be installed.
The virtuous cycle has begun.Bill Holter expresses things well:
Quote
“China has built out their infrastructure and even “ghost cities” using credit. Once the credit markets begin to default, they will be left with “stuff”, in place and will last for the next 50 to 100 years. Roads, bridges, buildings, airports, ports, etc., you name it they have already built it. And yes, their stock market will crash, their real estate market is already softening, in reverse and declining. I am not saying it will be all rosy, to the contrary, there will be bankruptcies galore in China… with a caveat. The “government” of China will go through this liquidation phase with the most gold in the world.” end quoteThey will go through this liquidation phase with the most REAL ASSETS in the world, starting with the aforementioned roads, railways, buildings, ports, factories and so forth, and continuing with a massive amount of gold — as Holter points out in this article, a bare minimum of 10,000 tons. (Yet another of their VERY SMART investments.)
And what will WE (the U.S.) go through this liquidation phase with? Why, with a handful of aging aircraft carriers and ICBMs, that’s what. And crumbling infrastructure. And a massive, unsustainable medical/industrial complex. And drained gold reserves. And an obese and increasingly disabled population. And so forth.
Nothing that I’ve said should be construed as meaning that all will be smooth sailing for China/BRICs, or for anyone. There is without doubt a crisis ahead, a “liquidation” as Holter put it, or a “reset” as others put it. It will not be pleasant for anyone. Everyone will take a hit, including China. However, my point has been, and remains, that it will NOT signal or initiate the collapse of industrial civilization and Malthusian dieoff. There will be a great moment of reckoning… and then life will go on, better in some places, worse in others. My bet is that it will be better in Eurasia, worse in the states. China and the BRICs will pick themselves up, dust themselves off, and carry on, and they have the REAL ASSETS with which to do so. We, on the other hand…
https://english.gov.cn/premier/news/2015/01/21/content_281475042663908.htm
European analysts confident about the prospects for China’s economy in 2015
Updated: Jan 21,2015
European business leaders and analysts are confident about the prospects for China’s economy in 2015.
“China has a very robust plan and a seamless execution of its economic transformation plan. This was the solid foundation that economic development had been successfully built on during the last 30 years and it will be a solid base for progress in the future,” president of the Swiss-Chinese Chamber of Commerce Kurt Haerri said.
“Further, it shall be noticed that China — unlike many countries in the West — has a long-term view and is therefore addressing the need for reforms timely and thoroughly,” Haerri added.
snip
Nicolas Musy, managing director of the nonprofit organization Swiss Center Shanghai, said that Swiss companies are actually experiencing a faster expansion of their businesses than before. “The reason is that seven percent growth today represents more added GDP than 11 percent growth in 2008″.
end quote…………………………..
Musy’s point is important. In absolute terms, 7% growth today is like 12-14% growth a decade ago. A large, maturing economy like China’s cannot possibly continue to grow, forever, at breakneck double-digit levels. It MUST slow down. And it is slowing down. This is good, healthy. If it were not slowing down, it would be a sign of an overheated situation, subject to violent correction.
China will probably settle into a 6-8% annual growth groove for the next decade or two. That rate would give a doubling each 10-12 years. Very healthy, very respectable.
As usual, the China bears — wringing their hands about China’s growth slowing to 7% — are wrong. Newsflash: 7% is NOT slow in the sense of “too slow”. Not for China. For Myanmar it might be, but not for China. 7% is slowER than before, and it is good.
The 10-12% growth days were possible, and necessary, for a good long while, to lift hundreds of millions out of poverty, and to generally expand the pie from its tiny starting size. That has now been accomplished, and the economy is beginning to mature. Not to mention the slowing population growth and aging population. With all that comes slower growth, in percentage terms (though still huge in absolute terms). It is all good. China is on a healthy trajectory.
Looks fine to me:
https://www.tradingeconomics.com/charts/china-gdp-growth-annual.png?s=cngdpyoy
I could not resist…
Ilargi:
“There seems to be a consensus that Chinese debt is somewhere in the range of $28 trillion”No, there is no consensus. What there is is a ton of blogs and other platforms all quoting from the same McKinsey study, which came up with that figure. In any case, McKinsey is a reliable firm and is probably right or close to right.
Ilargi:
“…which is almost twice US GDP, and almost three times Chinese GDP. And for all we know the debt may be much higher still. All we really have is official numbers, plus a few ‘indirect’ data. One thing we do know is that Beijing will always make everything look better than it is. Every politician does.”As I’ve mentioned several times (but apparently I’ve not been heard), a balance sheet which features ONLY liabilities, and fails to mention assets, is no balance sheet at all. Such a thing would be a joke. And yet that is precisely what TAE does every time I turn around — “debt rattle” this and “debt rattle” that. What about an “asset rattle” to impart some balance? In failing to do this, you cartoon-ize your own argument.
Here we see the other side of the story:
https://www.forbes.com/sites/jackperkowski/2014/01/21/chinas-debt-how-serious-is-it/
“China’s net assets exceeded RMB 300 trillion ($49.3 trillion) in 2011, almost three times China’s total indebtedness.”$49.3 trillion in assets! And that was in 2011. For all we know the assets may be much higher, since then. We don’t really know. One thing we DO know is that TAE will always make everything look worse than it is. Every neo-Malthusian apocalypse-addict does.
Ilargi:
“Chinese consumers [are] not consuming… No consumer based society is in sight.”You’ve gotta be kidding! Chinese consumer spending is rising rapidly, almost in hockey-stick form:
https://www.enterrasolutions.com/media/images/2009/10/6a00d8341c4ebd53ef0120a603d4f7970c-pi.pngConsumer spending was a modest portion of their total economy for a long time for several reasons, not least that they had other and bigger priorities, e.g. building a great industrial civilization more or less from scratch. This will slowly change. Consumer spending will continue to rise in absolute terms and as a percentage of total economic activity — especially with the aging population.
Ilargi:
“Meanwhile, China keeps investing billions abroad.”Yes, and this is wise.
Ilargi:
“Untold billions in Africa.”Yes, VERY wise. Africa is great place for investment. It is where China was, say, 40 years ago. Africa will boom long after China has begun to contract (which is inevitable with the aging population, leveling and decline of population, etc.). Buying Africa today is like buying Apple at 10 bucks a share. We (the U.S.) would be doing the same thing, if we were smart.
Ilargi:
“$60 billion in the new Silk Road project.”Yes, a GREAT idea which will foster dramatic growth throughout central and south Asia, and the entire Eurasian continent, and will ultimately generate wealth many times its cost. Indeed, the Eurasian land bridge (the new network of high-speed rail lines) is one of the most exciting and promising infrastructure development projects of all time. I am speechless with astonishment that you (seemingly) cannot see this, and portray it instead as some silly waste of money, an expression of profligate spending. Although it is a grossly overused expression, I must say: NOTHING, truly NOTHING, could be further from the truth. You will see the impact of the Eurasian land bridge in as little as 5-10 years. It will be a sight to behold, I promise you. It bodes very well for the future of humanity and its peaceful development.
Just one quick stat: the volume of freight moved across central Asia is expected to increase by THREE orders of magnitude, from thousands of tons to millions of tons, in just the next 5 years! That’s phenomenal, and it is only the beginning. The (favorable) impact on China’s economy, and the economies of the entire continent, will be profound.
You should start thinking now about what you’re going to do, i.e. what you’re going to write on your blog, when the world — instead of collapsing, as you have predicted so tenaciously — enters a great economic boom, skyrocketing the living standards of billions of people, and bringing about unprecedented health and well-being. I am not certain that that is going to happen, but it is a distinct possibility, verging on likelihood. I suggest that you focus more clearly on the plight of the U.S., which is unlikely to participate in any such party. The decline-and-fall narrative will resonate here, and reflect the reality here, but not elsewhere, IMO.
Ilargi:
“Why do we all allow the Chinese to purchase our homes and our land and our industries, and make them all more expensive for ourselves?”Haha! The plaintive cry of the American who Just Doesn’t Get It.
It is not a matter of us “allowing” them to do anything. They are doing what smart, increasingly-wealthy and forward-looking people DO. It cannot be stopped, short of complete isolation and withdrawal from the world stage.
THEY ARE WINNING, fair and square. We are not “allowing” them to do something that they have no right to do. They have EVERY right to do as they are doing. They’ve out-smarted us, out-worked us, out-played us. They’ve been winning for many years now, and the pace is accelerating. Their wise investments are paying off, and will continue to pay off for a century, perhaps longer. They’ve been smart; we’ve been stupid. I’ve been saying this for a long time. I will continue to say it for decades to come, and sooner or later you will see that it is correct.
We pissed-away probably upwards of $100 trillion (all-in cost including opportunity cost) on “defense” and other waste, while they built a great new nation, incredible new cities, stunning new infrastructure, vast industrial capacity, and so on. And now they are buying up our country and will soon outright OWN our asses. Hey, tough toenails for us! What the fuck did we expect? You can’t behave like a lazy fool for 50+ years and then expect everything to be hunky-dory — especially when your neighbor works hard, stays focused, and does the smart thing over the same period.
They are winning, and they deserve to win.
Ilargi:
“How and why can a country blow a $28 trillion+ debt bubble in a decade and proceed to use that debt to buy the world?”It is not a bubble if there is a sufficiency on the asset side. You pretend that this was all a matter of monopoly money-printing. But that is false. Their debts are backed by spectacular ASSETS in the form of scores of $trillions worth of modern infrastructure, productive capacity and objects of physical economy. For some reason you choose to ignore this, even though to do so makes a mockery of your analysis.
Cheers!
Alan
Dio shrugged: “Crashing oil prices aren’t the only problem. They’re just the current problem in a what TAE regarded years ago to be a predictable sequence.”
TAE has regarded many things as “predictable”. The factual record has not cooperated very well.
DJIA, march 2009: 6,600
DJIA, december 2014: circa 18,000The market has an agenda: to prove everyone wrong.
More on “ghost cities”.
Why is it so difficult for us (idiots) to comprehend that China is an advanced civilization with an aggressive and highly focused commitment to becoming much MORE advanced — and that building huge modern new (temporarily unoccupied, before they fill up) cities is part of that process?
https://www.bullionstar.com/blog/koos-jansen/guest-post-5-chinese-ghost-cities-came-alive/
Posted on 5 Aug 2014 by Koos Jansen
Guest Post: 5 Chinese Ghost Cities That Came Alive
snip
when a Chinese “ghost city” does fill up with people and businesses it inconspicuously falls off the radar of the dominant international media. It becomes a regular city, mashed into China’s broader urban matrix — a success story that few seem interested in hearing about. We are amused by empty streets, vacant shopping malls, and barren financial districts in China, not budding new cities steadily coming to life. Ex-ghost cities are rarely news.
Many places in China that have previously been heralded as ghost cities have by now been developed and populated. Though most are still works in progress, there is no way that they could rightfully be called ghost towns. Below are five new cities in China that have advanced through the ghost city phase and have come to life.
snip
prior to visiting Dantu all that I’ve ever heard of the place was that it was a deserted, failed development — one of China’s oldest White Elephants. “The ghost city of Dantu has been mostly empty for over a decade,” Business Insider reported. “In most neighborhoods of Dantu, there are no cars, no signs of life,” reported the Daily Mail. Both of these claims were made from looking at dated satellite images that showed the new district while it was still a construction site, not from reporters who actually went there. To put it bluntly, it’s no wonder the place looks empty: the images were taken before the place was built yet. As soon as the district was adequately constructed and pumped with the services that a population needs to live there, people moved in.
snip
The ghost city claims were made on the basis that there are a lot of empty apartments here. As I discovered early on in my ghost city project, just because an apartment complex appears empty isn’t necessarily an indication that the development is faltering, as there is an extended interim period between when the exteriors of residential buildings are built and the time when residents are able to occupy them.
Boogaloo: I’m sure that seeing things “live”, on-site, is a lot more impressive than reading abstract/dry numbers. Japan is in a very different situation: mature economy, hugely aging population, small island with no resources, and other problems. Of course, Japan is not going to collapse into obscurity as the bears might imagine; they have far too much strength for that. But they are in for problems, mid term. China: not so much. China has its issues as well, but they have so much more on the positive side that it is inconceivable that they will go down and stay down, as our TAE commentators seem to suggest.
We can’t go “live and on-site”, but photographs at least come close. Check this out, and scroll through the whole thing because it starts with the small stuff, and then gets to the big stuff. It is mind-blowing, even for me:
https://www.businessinsider.com/giant-chinese-infrastructure-projects-2011-6?op=1
108 Giant Chinese Infrastructure Projects That Are Reshaping The WorldYes, yes, I know, after the Big Crash ALL of this stuff will simply be abandoned and forgotten, and the Chinese will go back to feudal dirt poverty for all of eternity. 😉
Golden Oxen – I neglected to say: thanks for the encouragement! I don’t expect much in these parts, so it was refreshing. 🙂
Energy:
Natural gas is cleaner than coal. It will also be cheaper. It is also available in vast quantities (see graph at the link below): easily enough to support Eurasian development for a century — and that is plenty long enough to allow transition to renewables. China’s coal binge is/was largely just because it had a lot of coal, and not much natural gas. But there is plentiful natural gas on the continent; it is just a matter of building infrastructure to transport and use it. That is underway. Of course it won’t happen overnight. Nothing that big — in the REAL world — happens overnight. 5% of China’s energy comes from nat gas now; 10% by 2020, 15% by 2025, and so on. The numbers will be similar for renewables. Hence, the coal binge will (thankfully) end, coming to a slow, soft landing over decades. Good riddance!
https://online.wsj.com/articles/new-russia-china-deal-could-further-hit-natural-gas-prices-1415614816
New Russia-China Deal Could Further Hit Natural-Gas Prices
By Eric Yep Nov. 10, 2014 5:20 a.m. ET
“A preliminary natural-gas deal between Russia and China signed over the weekend paves the way for opening up a second major supply conduit between the two countries—and lowering natural-gas prices in Asia.”PS:
I mentioned two weaknesses of China bears: myopia/short-termism, and veiled racism/supremacism and exceptionalism. There is another one that I should mention. It is the assignment of grossly excess significance to the financial economy — to paper money or other abstract representations of wealth — rather than to the real wealth (the physical stuff that money buys and builds, and the hard assets). This is, if you’ll allow me my turn to wax biblical, a form of idolatry: paper money, or abstract representations of wealth, is worshiped as though it were the real thing. Its significance and power is estimated to be far in excess of its real significance and power. But it does NOT have real, enduring power. It is NOT the real thing. It is a false god. It has temporary uses, and I am not against it or its right uses. It has temporary power, and its collapse would surely have repercussions. But it should never be confused with what is real; it should never be the subject of worship.
To think that China — i.e. the entire vast modern nation, including all of the factories, roads, bridges, cities, the works — will somehow collapse into permanent chaos and impoverishment because of a collapse of fiat money, or bonds, or whatever is, effectively, idolatry. It is the taking of a cheap representation of the real as though it really were real — and (even) as though it were a real god with supernatural powers. This is idolatry, and perhaps animism. Superstitious. Those dollar bills (or T-bills, or what have you) are not mystical talismans with which one can command the elemental forces of nature. They might behave that way at times, under certain circumstances, but they do not have that power by virtue of anything intrinsic. It is all situational, cultural, consensual.
This idolatry problem, btw, seems built-in to the Western mentality, now; i.e. it is not just a characteristic of China bears. We worship the symbols instead of the real thing. Combined with the myopia, it is deadly. We pretend that “making money” by non-productive (or even exploitative and destructive) financial shenanigans this year or this quarter is equivalent to, say, realizing profits over decades from the dramatically improved commerce and human development resulting from the building a high-speed rail line from China to Turkey.
Boogaloo: “China has used these last days of current global monetary financial system to amass as many physical assets as possible, with the full knowledge that its own course and the entire system is unsustainable. A crash is coming, China knows it, and the entire system will reset. A massive amount of debt will be destroyed. And when the dust settles, China will be sitting on a mountain of gold and a country full of new infrastructure.
In the meanwhile, it is in China’s interests to keep the present system going as long as possible. If that means cooking the books, so be it. If that means a massive unregulated shadow banking system, so be it. Smart move in my opinion.”Yes to all. Fully agree that it is a smart move. They are smart; we are dumb. We’ll wise up, but it will be the hard way, and it will take a couple generations.
Boogaloo: “Yet it doesn’t change what the China bears are saying, does it?”
The difference is in the emphasis. The China bears tend to be (are not necessarily, but tend to be) apocalyptic doomers. The Great Fall of China, so to say, is part of their doomeristic eschatology, beyond which they cannot see. That last part is the key thing: cannot see beyond. Of course it is true, in a sense, that “the system is unsustainable”, but what doomers see is an unsustainable system going down in a great ball of flame AND NEVER COMING BACK. But that is not what is going to happen. That’s what happens in the Bible and other mythic works (think Armageddon, Ragnarok, etc.), but that is not going to happen in our temporal world. Our unsustainable system will, of course, not be sustained — by definition. And a different, somewhat more sustainable (for a while) system will be instituted. There are several words for this phenomenon1. The words are in the dictionary. Among them are: “change”, “adaptation” and “survival”.
Some China bears are not apocalyptic doomers. They’re more secular and superficially more rational. But they are afflicted with a couple of other problems. For one, chronic myopia or short-termism. They look at an empty new city and see only a “ghost city” or “empty airport”, rather than an investment that will START to pay off in 10 years, and will continue paying off for another 150 years. They see just the empty city, and somehow fail to see the hundreds of millions of people who very much NEED that city, and will start moving into it shortly (though not instantaneously, since such transitions cannot be instantaneous). Another problem, I’m sorry to have to point out, is racism and chauvinism — a toxic subliminal brew of residual “yellow plague” fear and hatred, and American/Western exceptionalism and supremacism. Like, “those bastard slants and gooks can be crafty at times, but us great Western Whites have it all over them”. No one actually SAYS this, of course, and few even (consciously) think it; far too crude. But that is the underlying attitude.
Funny, but just yesterday I was cleaning out an old pile of books, and engaged for an hour with a title by Victor Davis Hanson — a good example of the chauvinistic type that I’m talking about. The book was about the Western way of war, versus the Eastern. Hanson describes how the (inferior) Eastern mind, imbued with collectivism, Confucianism, etc., was vulnerable to defeat by the sometimes far-outnumbered white Westerners. He makes a very good case — if you don’t mind falling into the trap of exceptionalism and chauvinism, failing to see how the “inferior” Eastern mind is at this very moment developing physical economic systems that will have effects more devastating, and lasting, than any military defeat of yesteryear. I guess them darn slants and gooks CAN make some really smart moves after all, huh?
Boogaloo: “I also disagree with TAE that all of this is going to end in a big deflationary collapse. I agree that there will be a collapse, and I agree that in the beginning stage it will be deflationary, but I think it will culminate in a one-off reset event where the dollar will be subject to an (almost) overnight revaluation — not just against other currencies, but against the real world (including gold, all of those new Chinese cities, and everything that exists in the material world)”
Apocalypse now! Or soon. Yeah, maybe. It might come down like that. But the key thing is that it will not be the end of the world, the end of history, the end of industrial civilization, etc. It will be the end of certain things (e.g. debt excess) that had to end. But it will not end human energy, initiative, industry, intelligence and adaptability, nor will it end the built physical economy and hard assets — or as you put it: “the real world (including gold, all of those new Chinese cities, and everything that exists in the material world)”. Yo! China’s 15,000 kilometers of high-speed rail (for one small example) will not disappear or become inoperable or cease operations. Likewise all the other physical stuff.
Ilargi: “A Chinese manufacturing gauge fell as factory shutdowns aggravated a pullback in the economy [..] The government’s Purchasing Managers’ Index (PMI) fell to an eight-month low of 50.3 in November, compared with the 50.5 median estimate of analysts in a Bloomberg…”
Oh my GOD! The PMI is off by 0.4% over 8 months!? This is a catastrophe! China is melting down as we speak!!!
………………………………..
But seriously: I never cease to be amazed (and amused) at the “arguments” advanced by China bears, including (the mentioned) Jim Chanos. These guys have been wrong almost forever, now. But they keep plowing on, grinding out the same bear BS.
Yeah, I’m sure that one day — in stopped-clock fashion — they will be “right” for a brief interval, as the excesses get cleared away in a great swoosh. So what? That’s healthy. That’s what SHOULD happen in order to improve the foundation for the great growth yet to come. China needs a cleanout for a year or two. That would strengthen them.
I see all the lame fallacies in here, including the old “ghost cities” chestnut. I’ve dealt with that subject in some detail elsewhere (here? TAE? cannot remember) and I don’t feel like reinventing the wheel. Suffice to say that China’s so-called “ghost cities” are in fact a smart initiative. China is undergoing urbanization at a terrific pace, and it often makes a lot more sense to build whole new cities from scratch than to (awkwardly) vastly expand old ones. Naturally, and by definition, the new cities will be empty for a while, at the beginning. Big deal. Check back in five years, when they’re half-full, and ten years, when they’re full up. This has already happened in more than one of them. “Ghost cities” makes a great tabloid scare-headline. Too bad it is without substance. Building new cities at a breakneck pace is a wise investment, for them. They need the cities, and they have to put their purchasing/finance power somewhere. Much better than buying more bonds, or some other bullshit paper “investment” that can go up in a cloud of smoke any year now.
Along the same lines, the “China Wasted $6.9 Trillion On Bad Investment Post 2009” scare headline. I’m not impressed. A couple of obscure researchers, somewhere in the bowels of the Chinese bureaucracy, decided that all that money was “wasted” on “bad investments”. Well, I’m sure that a LOT of money has been wasted on bad investments in China. It would be impossible for it to be otherwise in a large industrializing nation. It is all a question of the amount, and who judges what is a “waste”. In one of the stories reporting this “6.9 trillion” figure, it is said that the money was “wasted” on “airports, industrial zones, and highways that no one needs.” Er, excuse me? That “no one needs”? How was that conclusion reached? Was it reached just by eyeballing these projects upon completion, and noting that the airports, highways and whatnot were (of course) EMPTY at that moment? If so, this is idiotic “analysis” that deserves no airplay at all.
Golden Oxen: “The Chinese, nor their trillions in reserves, are not going to suddenly disappear, not from a severe recession. Look at we were in 2008, and look at us now compared to then.”
Yes, well, it is not the “trillions in [dollar] reserves” that is so significant. Rather, it is what they have BUILT that is significant. Big piles of a fiat money are no big deal; that stuff could be devalued or even collapse, in short order. The industrial and other infrastructure that they have developed IS a big deal; that stuff will survive just about anything, and it will go on producing wealth even during and after a financial meltdown. (There is a huge difference between finance and physical economy. HUGE. Too bad Western morons seem incapable of grasping this.) Likewise their enormous and rapidly-expanding cache of gold — said to be north of 20,000 tons (!) now; that won’t be going away in a fiat/equities/bonds/etc. bonfire, either.
Actually — and I think you know this, G.O. — that gold very likely will be of great significance, especially when coupled with industrial might. China is brilliantly prepared (and preparing) for the great sea change now on the horizon — decline and fall of the great petrodollar regime. They are doing all the things that need to be done: very rapidly acquiring hard assets of all kinds (while ceasing to buy new u.s. bonds); building more industrial and transport infrastructure (which ARE hard assets of a sort – with intelligence built in); building whole new cities to house the urbanizing population and support industrial growth; rapidly developing alternative energy production capability; rapidly developing natural gas import capability; etc., etc. All of this stuff is critical, and must be done right away — just as they are doing it. They’re making mistakes along the way, of course, and they’ll pay a price for that. That is unlike the proprietors of TAE, who would undoubtedly run China in an error-free manner, given the chance. 😉
A few more relevant comments:
I’ll be stopping back every year or two. We’ll see if China has collapsed into unrecoverable chaos by then. Don’t hold your breath, please.
Signs of the times:
High-speed rail, kilometers:
China, year 2000: 0
China, end 2013: 11,085
China, end 2020: 25,000 (est)U.S.A., year 2000: 0
U.S.A., end 2013: 0 *
U.S.A., end 2029: 600? *** U.S. has a few hundred miles of slightly-upgraded old-style track, sometimes described as “high speed”, but nothing high speed in the modern (China) sense.
** If the California Bay-to-LA line is built (problematic; supposedly by 2029 if it happens). Other than that, nothing clearly on the docket.
