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A review of things you need to know before you go home on Monday; ASB and TSB change mortgage rates, services sector strong despite issues, Govt 'misleading' on EV utes, swaps firm, NZD holds, & more

A review of things you need to know before you go home on Monday; ASB and TSB change mortgage rates, services sector strong despite issues, Govt 'misleading' on EV utes, swaps firm, NZD holds, & more

Here are the key things you need to know before you leave work today.

MORTGAGE RATE CHANGES
ASB cut its 1yr rate and raised its 3, 4, and 5 year fixed rates to levels of its main rivals. More here. TSB raised is three longest rates too.

TERM DEPOSIT RATE CHANGES
No changes to report here today.

THE RETURN SURGE ENDS
The number of New Zealand citizens returning long-term was at its lowest level in April since records began in 2002. But +6300 people still arrived here (net) in the year.

AVOIDING A DOUBLE-DIP
Economists have been upwardly adjusting their economic forecasts in recent days in the face of stronger-than-expected data and the major bank economists now see first quarter GDP producing a positive figure - that is, economic growth.

STRENGTH DESPITE CHALLENGES
Supply-side issues are weighing on the services PSI. New orders came in with a very high index level of 62.1 recording a strong sector. But tourism and education remain a drag on the overall sector and that especially affects Auckland. Despite that, the May level was well above its long-term 'normal' and despite those supply issues. It is a sector where the expansion remains strong.

MISLEADING SIGNALS
The new car importers lobby group, the MIA, is worried that Government ministers have been "potentially misleading" in their upbeat assessments of the coming availability of EV utes. The MIA says "despite comments by some Government Ministers this morning, manufacturers of current popular makes of utes have confirmed they will not have battery electric (BEV) utes of their brands coming to the market in the next 12 to 24 months ... our expectation is plug-in hybrid (PHEV) utes might become more widely available by 2025 and full battery electric (BEV) utes after that."

UPCOMING DATA
Please note that the May REINZ data will be available here at 9am tomorrow.

GOLD SOFT
Compared to where we opened this morning, the gold price is down -US$12 and now at US$1866/oz in early Asian trading. It closed in New York at on Saturday at US$1878/oz and in London at US$1881/oz.

EQUITY MARKETS THIN
There are public holidays in many key equity markets today. Most of Australia is closed for their Queens Birthday holiday. In Shanghai and Hong Kong, it is a long weekend for their Dragon Boat Festivals. Tokyo is open and has started with a +0.4% rise in early trading. The NZX50 Capital Index is open and is -0.3% lower in late trading. The S&P500 futures index suggests Wall Street will open flat.

SWAP & BONDS YIELDS UP
We don't have today's closing swap rates yet. If there are significant changes again today, we will update this item. They probably held. The 90 day bank bill rate is unchanged at 0.32%. The Australian Govt ten year benchmark rate is up +4 bps at 1.46%. The China Govt ten year bond is up +3 bps at 3.15%. The New Zealand Govt ten year is up +1 bp at 1.65% and now the same as the earlier RBNZ fix of 1.66% (-1 bp). And the US Govt ten year is up +3 bps to 1.46%.

NZ DOLLAR HOLDS
The Kiwi dollar is holding at 71.4 USc and just marginally above where it was this morning. Against the Aussie we are little-changed at 92.7 AUc. Against the euro we are still at 59 euro cents. That means the TWI-5 is still at 73.2 and marginally off its low from where we opened this morning.

BITCOIN JUMPS
The bitcoin price has found its wings today and is now at US$39,222 and up +5.0%% from where we opened this morning, spruiked by Elon Musk talking his book. His cult followed. Volatility in the past 24 hours has been extreme at +/- 7.1%.

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60 Comments

34
up

I live in rural nz and use a Ute to move stuff around, tools, soil, branches. I also have a boat and my interests include going into the back country to fish, tramp and so on. I couldn’t do any of this stuff without 4x4 and a fair bit of torque. I do despair for the rural way of life. The deification of clycle lanes and EVs, the demonisation of farmers and so on. I have some land, grow a lot of my own food, have solar (my power bill is often around $60) lots of carbon gobbling trees, use rain water and my sewage is treated and comes out as pretty clean water which goes on to my land. I think I’m pretty green, but do I get any credit? We contribute 0.1% of the world’s emissions, probably far less on a net basis. How will a punitive tax on Utes, and subsiding middle class EV buyers keep the global temperature increase below 1.5degs above the 1850 benchmark. Let China, the EU, the US, India, Australia stop burning coal before we take measures which will wreck our rural economy. And does anyone else have a problem with the way we are turning our country into a giant forest of pine weeds?

15
up

5-10% price increase on a hilux. Closer to 5% if you're talking about a 4wd version. People who actually use them will still get them. Those who don't, and there are loads, will hopefully be nudged in a different direction.

My 2020 Hilux uses under 9l to do 100kms (a bit higher than Toyota’s quoted figure). I can get 14-15 kms on a run. My previous Yeti, a 1.4l Audi clone, used almost 8l per 100kms, our company Rav 4 does 7.5l per 100kms. Not much of a difference, and hardly worth demonising utes for. I’m not really complaining. Apparently late model second hand utes will go up in price, according to some industry body. I would much rather see emissions tested as part of a Wof. That would do some real good.

Careful with comparing new and old, in general new is much more efficient. But, yes, the rav4 is almost 20% better on fuel and would have a better rating. That's the point, it's all based on emissions, not demonising utes per se, only insomuch as they tend to have higher emissions.

My 2019 corolla does 5.9l per 100k, nearly half as much as your 2020 ute. Corolla is 2l petrol, not hybrid.

Actually, 66%. And if used a Corolla for work, I would need to do twice as many trips because of the load, or use a trailer which of course would up the fuel usage to that of my hilux. So many variables.

Sorry but why all the crying from 4x4 owners? If you bothered to check whats currently being developed you may just calm down a touch, and possibly get excited. Also if you have solar no more trips to the petrol station.

Rivian are promising two off-road-focused EVs, the R1T ute and R1S wagon, both based on the same platform. The R1-T is 55000mm long so about the same length as a Ranger, but unlike a Ranger, you open the bonnet and find yourself extra storage space. Specifications include a 5000kg tow rating, air suspension. 640km range, 370mm ground clearance, 900mm wading and 0-100km/h in three seconds. The most interesting feature is what we’ll call IWD, or Individual Wheel Drive – one motor at each wheel, which, mark my words, will make it the most capable off-roader ever, provided it’s calibrated right. The vehicles will also have Level 3 driving autonomy, so closer to self driving than just about anything else. Rivian look like one of the more serious EV specialists, with major backing from both Ford and Amazon, and working prototypes in development. Expect them in Australia in 2021 or 2022.

13
up

How many Congolese kids does it take to make a Rivian battery and how much Indonesian coal does it take to fill that baby up?
"In the case of cobalt, 60% of the world’s supply comes from the Democratic Republic of the Congo where large numbers of unregulated mines use children as young as seven as miners. There they breathe in cobalt-laden dust that can cause fatal lung ailments while working tunnels that are liable to collapse."
https://www.theguardian.com/environment/2021/jan/03/child-labour-toxic-l...

So buy an EV with a battery formulation that doesn't use Cobalt, all Teslas have moved away from it, presumably other manufacturers will do the same eventually.

PR much?
"Still, some major carmakers, like Tesla Inc., Volkswagen AG and China-based BYD Auto Co. Ltd., are already working to shift part of their stock toward low- or no-cobalt chemistries."
https://www.eenews.net/stories/1063734521
https://www.deseret.com/utah/2021/5/23/22441889/our-children-are-dying-l...

Congolese kids. And how many slave labourers does it take to keep the arabian peninsular pumping?

Keep up KH - worker exploitation, resource depletion, and recyclability of components only affect renewable energy and electric cars, not 'business as usual'. Best not talk about the ~4 million deaths per year from air pollution caused by burning stuff either, that's not relevant.

Libya, 2 invasions of Iraq, 2 attempts at controlling Iran, a chessboard need to be in Afghanistan, patrolling carrier-forces, Venezuela puppet-control then attempts to undermine....... And nobody's really written the PNG/Indonesia stories yet. And they had to hang Ken Saro-Wiwa (and if memory serves, they have yet to Shell out). Even the backing of Israel, can be seen as energy-strategic.

Sad epitaph, but standard for Empires and they all die.

11
up

How many Rivians will we need to support the green mining boom? Do we need to more farmers to pay for it?
"To replace all UK-based vehicles today with electric vehicles (not including the LGV and HGV fleets), assuming they use the most resource-frugal next-generation NMC 811 batteries, would take 207,900 tonnes cobalt, 264,600 tonnes of lithium carbonate (LCE), at least 7,200 tonnes of neodymium and dysprosium, in addition to 2,362,500 tonnes copper. This represents, just under two times the total annual world cobalt production, nearly the entire world production of neodymium, three quarters the world’s lithium production and at least half of the world’s copper production during 2018. Even ensuring the annual supply of electric vehicles only, from 2035 as pledged, will require the UK to annually import the equivalent of the entire annual cobalt needs of European industry.

The worldwide impact: If this analysis is extrapolated to the currently projected estimate of two billion cars worldwide, based on 2018 figures, annual production would have to increase for neodymium and dysprosium by 70%, copper output would need to more than double and cobalt output would need to increase at least three and a half times for the entire period from now until 2050 to satisfy the demand.

Energy cost of metal production: This choice of vehicle comes with an energy cost too. Energy costs for cobalt production are estimated at 7000-8000 kWh for every tonne of metal produced and for copper 9000 kWh/t. The rare-earth energy costs are at least 3350 kWh/t, so for the target of all 31.5 million cars that requires 22.5 TWh of power to produce the new metals for the UK fleet, amounting to 6% of the UK’s current annual electrical usage. Extrapolated to 2 billion cars worldwide, the energy demand for extracting and processing the metals is almost 4 times the total annual UK electrical output

Energy cost of charging electric cars: There are serious implications for the electrical power generation in the UK needed to recharge these vehicles. Using figures published for current EVs (Nissan Leaf, Renault Zoe), driving 252.5 billion miles uses at least 63 TWh of power. This will demand a 20% increase in UK generated electricity.

Challenges of using ‘green energy’ to power electric cars: If wind farms are chosen to generate the power for the projected two billion cars at UK average usage, this requires the equivalent of a further years’ worth of total global copper supply and 10 years’ worth of global neodymium and dysprosium production to build the windfarms.

Solar power is also problematic – it is also resource hungry; all the photovoltaic systems currently on the market are reliant on one or more raw materials classed as “critical” or “near critical” by the EU and/ or US Department of Energy (high purity silicon, indium, tellurium, gallium) because of their natural scarcity or their recovery as minor-by-products of other commodities. With a capacity factor of only ~10%, the UK would require ~72GW of photovoltaic input to fuel the EV fleet; over five times the current installed capacity. If CdTe-type photovoltaic power is used, that would consume over thirty years of current annual tellurium supply.

Both these wind turbine and solar generation options for the added electrical power generation capacity have substantial demands for steel, aluminium, cement and glass."
https://www.nhm.ac.uk/press-office/press-releases/leading-scientists-set...

10
up

This government, admittedly not uniquely, has demonstrated inadequacy in identifying what the people of NZ, the electorate, consider to be priorities. Case in point the 2019 immigration stats on site here today in another column. There has been a lot of fanfare, climate emergency, refugee offers, big bicycle bridge all internationally acclaimed perhaps, and now this EV quid pro quo which seems to me to penalise those engaged in working their legitimate livelihood for having to use the tools of their trade, ie certain utes. Appears to be more haste than thought, very much getting the cart before the horse.

Carbon taxes are never put to vote here. The 1% uptake of AirNZ carbon offsets shows how keen workers are on paying tax to change the climate back to the Little Ice Age.
"Swiss voters on Sunday rejected proposals to further reduce CO2 emissions by 2030 and to ban synthetic pesticides.
The proposed "carbon dioxide law" included an increase in taxes on fuels and the introduction of a tax on airline tickets from Switzerland."
https://www.euronews.com/2021/06/14/swiss-reject-tax-hike-to-cut-carbon-...

14
up

Don’t waste your time on facts. Mob hysteria rules. If 25% of the people who now have a car had an EV, we wouldn’t be anywhere near being able to cope with the extra load on the grid. That would be like adding over a million homes. The billion dollar Lycra brigade bridge New Zealand’s wealthiest two suburbs was the final straw. What idiot thought that one up?

Except thats simply not a fact. Most cars are parked up overnight, charging between midnight and 6am would not stress the grid. Total generation would be another issue, but even if that extra generation came from oil or gas powered generation it would still be a net win for reducing transportation emissions and air quality.

It's also safe to assume that any major increase in gas/coal burning will quickly (i.e. a few years) be replaced by renewables, as they are so much cheaper. Burning coal for power is now very expensive compared to sticking up wind mills, and as the price of carbon increases as the cap tightens the disparity will get larger.

The dry year issue (as we're experiencing now) is separate and needs storage or variable demand such as Meridian/Contact's hydrogen plans.

#pragmatist
It takes 23 hours to charge up a 62kw Leaf on a standard home system. That’s midnight to 11pm.

From Vector’s chief executive: "You might have one household worth of energy on a property and by virtue of putting a charger in your home - and not a fast charger or a super charger, it's just a pretty standard type of charger - that's like adding two more households worth of energy on your existing load."

Mind you, he could telling porkies. Only the believers tell the truth apparently. I think we have to accept that there are huge infrastructure challenges ahead. Standard chargers are much too slow, and retrofitting a fast charger to a home is around $4k I believe. Now that would be a better use of taxpayer cash than a price distorting subsidy. And I’ve not even mentioned super chargers at service stations or other locations. How many of those are we going to need?

A huge challenge to be sure, probably comparable to the original challenge of rolling out ICE cars and all the associated infrastructure but hopefully in a much shorter time.

But what is your alternative? My preference is for the vast majority of journeys to be done by walking, bike or public transport. Obviously not a great option in rural settings but for the millions in cities using cars of any kind every day is an absurd luxury.

My Tesla Model 3 charges 120km of range in 10 hours overnight, off a 10 amp socket. I uprated the socket to 15 amps. I now get 180km of range per 10 hour session. Normal plugs also fit in 15 amp socket. If charge each night and use all 180 km then I will travel 65,700km. That would cost me $1,644 in power.

Thanks for this info. Your charging solution would work for me. Seriously considering a new model 3, but not keen on installing a Tesla wall charger in my garage as that kind of current draw has me concerned if no one is at home whilst charging. I know, next to no chance of anything happening, but I wouldn’t leave my oven on whilst I’m out of the house either. I currently drive heavily modified Mustang so looking forward to embracing the future with a BEV and feeling better about the car I drive. But, it sure as heck won’t sound as good!

Pietro,

Our Leaf with a 30kwh battery takes 13 hours to fully recharge through a standard wallplug. That works fine for us-6pm to 7am.

I don't understand the comments from Vector. We have only had the car for a few months, but there has been little change in our electricity bill.

Hear! Hear!

It's a sign of virtue that your sincere way of life is not championed by the misguided political forces of the day. Work towards ever increasing self reliance and shun the genuflecting towards 'political approval or support'. The land is bountiful. The people are resilient and true wealth is a generous heart. It sounds like you have the resourcefulness to thrive.

I sympathise. I have found it easier to focus on things that are going well, not only is it a very short list it helps with my mental health. We have the most liveable city. We are winning the cricket. The price of commodities continues to rise. Immigration is down from what it was. That is my complete list, please feel free to add any you can think of.

Every other thing on any dimension or time series is heading the wrong way so try to avoid thinking etc. I am a bit lost now that the Masked Singer has concluded but our media will fill the vacuum shortly.

> We contribute 0.1% of the world’s emissions, probably far less on a net basis. How will a punitive tax on Utes, and subsiding middle class EV buyers keep the global temperature increase below 1.5degs above the 1850 benchmark. Let China, the EU, the US, India, Australia stop burning coal before we take measures which will wreck our rural economy.

On a per capita basis we emit slightly more than China and about twice that of India. All countries need to do more to reduce emissions.

Us included.

Does it include emission from Agriculture? because, that should be counted against with the consumer really (which means we should account for GhGs in our imports).

Yes, it includes agriculture.

I'm not sure I'm understanding the meaning of your comment, could you ELI5?

The greens need farmers to beef up the per capita numbers (not just for their 4x4's). That and some out of date CH4:CO2 conversion factors.
"Short-lived pollutants, like methane, disappear within a few years. Their effect on the climate is important, but very different from that of CO2: yet current policies treat them all as ‘equivalent’.
... Under current policies, industries that produce methane are managed as though that methane has a permanently worsening effect on the climate,” says Professor Frame. “But this is not the case. Implementing a policy that better reflects the actual impact of different pollutants on global temperatures would give agriculture a fair and reasonable way to manage their emissions and reduce their impact on the environment.”

“Implementing a policy like this would show New Zealand to be leaders and innovators in climate change policy,” says Professor Allen. “Implemented successfully, it could also completely stop New Zealand’s contribution to global warming.”
https://www.oxfordmartin.ox.ac.uk/news/2018-news-climate-pollutants-gwp/

> Short-lived pollutants, like methane, disappear within a few years. Their effect on the climate is important, but very different from that of CO2: yet current policies treat them all as ‘equivalent’.

Methane doesn't disappear, it breaks down into CO2, seems to me that treating them an equivilent makes some sense, I would be interested to hear arguments otherwise though.

http://www.ces.fau.edu/nasa/module-4/causes/methane-carbon-dioxide.php

The arguments otherwise in the link. Farmers in NZ are being played.
"... Under current policies, industries that produce methane are managed as though that methane has a permanently worsening effect on the climate,” says Professor Frame. “But this is not the case. Implementing a policy that better reflects the actual impact of different pollutants on global temperatures would give agriculture a fair and reasonable way to manage their emissions and reduce their impact on the environment.”
ttps://www.oxfordmartin.ox.ac.uk/news/2018-news-climate-pollutants-gwp/

A rather pathetic analysis.

If I have a machine that produces 5t of methane per year and outputs 10t of product, I shouldn't be taxed because that 5t breaks down quickly.
Of course next year, I will produce another 5t (you seem to forget this profile) plus another 1t, because I didn't get penalised.

Methane might stick around for less time, but if we keep producing it in ever greater amounts because nobody is being penalised, it will have an increasing warming effect to where we are now. Not only that, when methane does break down, it converts into CO2, so causes exactly the same issues that CO2 does, but just with a greater initial warming effect.

"... but if we keep producing it in ever greater amounts...". NZ farmers aren't producing more methane though are they. It peaked in the mid 90's without any ETS or hand wringing doomsters.
How typical of a chicken little to write off a paper published in Nature by Oxford and NZ professors as pathetic analysis when you clearly don't even have a clue about NZ methane emissions.
https://pcep02s1.blob.core.windows.net/cache/5/a/1/3/6/8/5a136842a51fbc6...

Even your own image shows what we should be concentrating on, that is the emissions cloud which we have and are adding to, Easton did another good analysis of this here: https://www.eastonbh.ac.nz/2019/03/new-zealands-methane-cloud/

Your commentary appears to suggest that we should not worry about methane emissions because they break down, which is utter garbage. We need to significantly reduce our methane cloud size because the larger it is for longer, the more warming effect it has. The faster we drop it, the better it is for us. That's not chicken little, that's basic understanding of global warming factors and basic laws of thermodynamics. If we continue to have the attitude that we don't need to do anything to solve a major problem, that's sticking your head in the sand and hoping the problem goes away.

profile,

Read this-https://niwa.co.nz/atmosphere/our-data/trace-gas-plots/methane It shows-very clearly-that our methane emissions are on a sharp upwards curve. Where do you think that it comes from?

Would be fair to calculate for grass growth as well, but it are very one sided formula they use. Farmers are not stupid.

Dear lowercase capitalist
I think one valid argument is that we produce food very efficiently, ie by feeding animals on grass rather than burning rainforests to do so. If less efficient countries take up the slack the CCC wants to impose on our farmers, surely global emissions will rise? And China is in a position to limit warming to that dubiously modelled 1.5% above the 1850 figure all by itself. It burns more coal than the rest of the world combined. If we sank beneath the waves tomorrow, global emissions would still be 99.9% of what they were before that tragic event. Global transport accounts for 15% of emissions, burning coal accounts for 30% of total emissions. Go figure. And how do think China’s factories are powering the machinery that makes their EVs?

Not really we planted 3 acres in pines several years ago. Much of the land in NZ is crap and should never have been cleared of native Bush in the first place. Sure would have been nice to plant natives instead but imagine the cost.

10
up

Pietro, this is the type of policy rubbish you would expect from ministers who have never had a real job! It's all about optics, not real world practicality! All those that claim there are going to be sensibly priced EV utes available for NZ conditions in the near future are dreamers! This government will be recorded in future history as the worst ever!!

"All those that claim there are going to be sensibly priced EV utes available for NZ conditions in the near future are dreamers!" Why - and what conditions does NZ have that are unique?

All past Governments have been advocates for Growth.

So they were all wrong. As were we, who built, incrementally, a set of infrastructure (utes, trailers, hear the chatter) including suburbia, based upon a finite resource, Of course it was going to bite us in the bum. What Labour are attempting, is BAU but with no, or lesser, impact. Can't be had. We have to do several orders of magnitude LESS than BAU.

There WILL be chatter. And fear. And fearful chatter. There are best-cards to play, but I doubt we're going to get to the point where we are prepared to listen.

Crawl back under your rock Frazz!

Ha...I crawled out years ago,,but you stay there DDT - obviously you could not back up your comment?

Then mark the PM down as a dreamer, with a poor recall of facts too.

Toyota New Zealand shuts down Jacinda Ardern's claim company is 'talking about bringing in EV utes'

https://www.newshub.co.nz/home/politics/2021/06/clean-car-package-toyota...

Global motoring giant Toyota is criticising the Government after the Prime Minister suggested it's in discussions to bring an electric version of its famous ute into New Zealand.
Toyota has since confirmed it has no plans to bring any electric utes into New Zealand within the next two years.

Mind you can see how Toyotas run better than this Government.

You need a hilux , and there is no reason you can't have it. if you want to buy a new one it will cost you more , but the hilux is good for 500k plus.
most of the 4wd 4 door utes never leave the tarseal, never tow a trailer, or get fully loaded. same with the big suv's , remuera tractors. mostly status symbols, chewing gas when a smaller vehicle could do the same job. Even the councils have pen pushers driving them around , when a small suv would do , maybe have a small pool of 4wd's for the once or twice a year they actually need them .

You need a hilux , and there is no reason you can't have it. if you want to buy a new one it will cost you more , but the hilux is good for 500k plus.
most of the 4wd 4 door utes never leave the tarseal, never tow a trailer, or get fully loaded. same with the big suv's , remuera tractors. mostly status symbols, chewing gas when a smaller vehicle could do the same job. Even the councils have pen pushers driving them around , when a small suv would do , maybe have a small pool of 4wd's for the once or twice a year they actually need them .

China, Germany, US etc. have to burn coal, how else will they make all the cheap EVs government want you to buy? Even in New Zealand there won't be enough energy to charge your EV without Huntley burning coal. Actually buying an EV is a very small part of electrification.

The bitcoin price has found its wings today and is now at US$39,222 and up +5.0%% from where we opened this morning, spruiked by Elon Musk talking his book.

Regardless, analytics suggests that we're at the end of an accumulation phase by the whales. This does not mean the end of accumulation full stop. It means the end of accumulation since the most recent correction. So basically that means that the holdings of the Johnny come latelys who are not emotionally equipped for the volatility of the market have bailed out. It seems to be a recurring pattern with the real winners being the long term, buy the dip and the DCA segments.

Still not out of the woods yet, but there are so many coins coming up against that descending trend line, that if we do get above 40k theres going to be a lot of green in the market!

Although the amount of shorts piling in on Bitfinex is a very interesting development, rather counterintuitive compared to every other exchange. Have to keep an eye on those whales and their trickery.
https://www.tradingview.com/x/Ks1uhC4F/

Cheers Gally. Never out of the woods. That's the current phase we're in. Did you see that dreadful Elizabeth Warren with her misinformed propaganda stunt? Truly appalling for someone who I used to respect.

The whales are playing it like a puppet on a string. But once again, if you're not emotionally equipped to deal with it, then stay away.

When looking around for a first casualty of collapse, the global semiconductor industry makes a strong candidate. It is very energy-hungry and extremely capital-intensive. It relies on a steady, reliable energy supply—wind and solar won't cut it because of their intermittency. It relies on the availability of highest-purity crystalline silicon and rare earth elements that are sourced from just a few places in the world, the main one being China. And it requires a highly disciplined and skilled workforce. The largest exporter of integrated circuits by far is China (Hong Kong and Taiwan included) followed by South Korea, Singapore and Malaysia. The US is only the first in a long list of minor players in niche markets.

It seems natural to expect that, as the market conditions affecting the semiconductor industry continue to deteriorate while the demand for critical components needed to maintain vital infrastructure systems around the world continues unabated, China will be able to exert a disproportionate influence on the availability of these components. It is quite foreseeable that the Chinese Communist Party will see the semiconductor industry as strategically important and nationalize key parts of it, fashioning it into a tool of foreign policy. The United States will, of course, pretend to be doing something about this state of affairs, making for a noisy international environment, but will not be able to prevent access to semiconductor products from becoming rationed, with China in almost complete control of the arrangements.

These arrangements are likely to be enforced by China and Russia working in tandem. China is insular by nature and can in general either trade with other cultures or absorb them. The one exception in Russia, to which China now clings like a needy girlfriend. The symbiosis is a natural one: unlike China, Russia is the opposite of insular and can digest and appropriate entire foreign civilizations. This century they are Mongols; next, Germans; then the entire Russian imperial court starts speaking French; and now English is fashionable.

As Putin famously put it, "The borders of the Russian Federation do not end anywhere." Unlike China, whose military is huge but untested in battle and uninterested in power projection, the Russians are a warrior culture that prides itself on its invincibility and that has made coercion to peace its specialty. Russia excels at building and operating huge energy, transportation and materials production systems which China needs and has the vast natural resources to continue operating them for centuries. Its fossil fuels will hold up for another half a century; after that, if all goes according to plan, it will switch to burning depleted uranium using its closed nuclear cycle technology, and there are a few thousand years' worth of it already stockpiled.

Faced with such major difficulties, the technosphere has not given up. Without filing a change of address form, it has quietly relocated and is now busy telecommuting between Moscow and Beijing. Those frisky boys at Davos and their James Bond villain wannabe Klaus Schwab are yet to get used to this turn of events. Putin and Xi have pretty much said this to their faces at their last virtual confab, but I don't think that the news has quite sunk in with them yet; let's give it time. The Germans seem to be quicker on the uptake than the rest, having understood that without Russian natural gas they would be nothing. The Americans seem to be the slowest; at this rate, it may take forever for the penny to drop. They may go down into the gurgling void all the while exclaiming that their Atlantis is not sinking! Link

Yep, as we discussed this morning.
Resources are artifacts of technology.

# GenLess is doomed to failure

You suggested it.

But you were 100% incorrect - and that hasn't changed.

Resources are pieces of a finite planet. Otherwise why mines and farms and forests and dams? They're all about physical resources. You can use technology to design the machines which mine and the dams which hold water back - but those builds are made from processed parts of the planet too, using energy. Which puts you back in Laws of Thermodynamics territory.

The whole planet is ultimately solar powered. There's more energy coming from the sun every day than we can conceivably use. Even fossil fuels are basically stored solar power.

With the global population projected to go into decline before long, I don't see how we're going to run out of energy.

Regarding technology, what use is an oilfield or a coal mine without the technology to use it? Technology opens up new ways of using previously useless resources.

Hi PDK, I’ve really enjoyed reading your posts over the years and I’ve learned a lot from you and the links you provide. I’m not the sharpest, so a lot of it goes over my head but it gets me thinking! On a serious note, given that we can’t do anything about our out of control population growth as the world simply is not ready for that conversation, what would be the single thing that you would implement immediately that would have the biggest environmental benefit for our planet? I appreciate it’s not a very fair question as the issues are so complex from an execution perspective, but I’m genuinely interested in your opinion. I quite like living on earth so would be keen for future generations to also have that chance.

When we want to "save the planet" we use a bicycle, and if its too far to bike, a1.0l Skoda, the blurb said would use 4.2l/100km, but its ended up being 3.8l/100km, perhaps because we don't turn the aircon on.

What a professional outfit, talking about cults etc when referring to the market. Pathetic but this is the standard of journalism these days