[Hat Tip Mailroom] This is a very interesting little bureaucratic energy issue with big downstream ramifications.

Almost every transportation and manufacturing company uses the U.S. Energy Information Administration (EIA) “weekly publication of average diesel prices” in order to calculate shipping costs.  According to people in the industry, “this national average is what almost every trucking and logistics company bases their fuel surcharges on.”

However, on June 13th the U.S. Department of Energy, Energy Information Administration, stopped reporting the average weekly diesel price.  For almost a month companies have been using an outdated average price in order to calculate shipping costs and fuel surcharges. [See Screengrab]

Originally the EIA said, “We are implementing new methodology to estimate weekly on-highway diesel fuel prices. On June 13, we started conducting the On-Highway Diesel Fuel Price Survey using new statistical methodologies.” {LINK} However, the EIA has not updated anything since that announcement.

As a result, all of the transportation charges and fuel surcharges have been underestimated and priced for almost a full month.  The political motive for this move is transparent, it stops higher diesel prices from being passed along in the supply chain… which gives an artificial pause on inflation that comes as an outcome of higher diesel transportation costs (specifically trucking).  As explained to CTH:

(more…)

The Wall Street Journal has an interesting article [SEE HERE] outlining inter-connected data points for various state economies in a post-pandemic environment.

The topline takeaways are: (1) Employment in red states has fully recovered, and now exceeds the number of jobs as before the pandemic. (2) Employment in blue states remains below the pandemic numbers; meaning they have not recovered. (3) Net migration still shows people fleeing blue states like New York, California and Illinois; while (4) Net migration into red states like Florida, Texas, North/South Carolina and Tennessee is continuing.

(Wall Street Journal) – […] Forty-six million people moved to a different ZIP Code in the year through February 2022, the most in any 12-month period in records going back to 2010, according to a Moody’s analysis of Equifax Inc. consumer-credit reports. The states that gained the most, led by Florida, Texas and North Carolina, are almost all red, as defined by the Cook Political Report based on how states voted in the past two presidential elections. The states that lost the most residents are almost all blue, led by California, New York and Illinois. (read more)

The professional business class analysts (eyeroll) at the WSJ attribute the demographic shifts to the worker disconnect from the office.  Meaning workers can now work from home and are moving to environments where the quality of life is better.  White collar workers no longer bound to the geographic limitations of central office locations.

While some of that is likely accurate, there is no consideration for the lockdown effect.  The results of the pandemic showcased a very brutal acceptance, more people now seemingly realizing the politics of their regional leadership has a direct and consequential impact to the quality of their life.  The blue state leaders, ideologically disposed to dismissing the opinion of citizens, generally dispatched any consideration for the quality-of-life impact they created.  The people were irrelevant.

(more…)

The government in the Netherlands is taking a playbook directly from Canada. Keep in mind that Canadian Prime Minister Justin Trudeau and Dutch Prime Minister Mark Rutte are two top-tier government influencers of the World Economic Forum, Davos crowd.

Trudeau and Rutte have a close and personal relationship, so it doesn’t come as a surprise to see the Dutch government trying to stop farmer protests following the same approach as the Canadian government toward the trucker protests.

In a short video resurfacing today, the farmers caught Dutch police units disguising themselves as farmers and infiltrating the protest. According to independent journalists who were recording the events, the plain clothes units were agitating for violence, a tactic to initiate a heavy-handed government response.

When the Dutch people realized they were police the undercover ‘Agent Provocateurs’ pulled batons to protect themselves and desperately retreated to a nearby police van. WATCH:

https://youtu.be/XorUUl4xQsk

Background on Farmer Protests Here

(more…)

The politicians in Dutch government recently passed sweeping new climate regulations that will result in more than a third of farmers losing their business. The government announced a €25 billion plan to radically reduce the number of livestock in the country in order to curtail emissions.

As the Guardian reports, “A deal to buy out farmers to try to reduce levels of nitrogen pollution in the country had been mooted for some time,and was finally confirmed after the agreement of a new coalition government in the Netherlands earlier this week.” The plan is to reduce farming in the Netherlands, by a “one-third reduction in the numbers of pigs, cows and chickens in the country.”  However, the farmers are fighting back.

The unorganized grass-roots groups have been randomly blocking roads and transportation hubs for the past three days.  They have also been dropping truckloads of manure at the entrances of government businesses.  In a show of solidarity, the fishing industry is now blocking ports.  Additionally, the farmers are starting to block the distribution centers of supermarkets and key roads forming a cauldron where transit is at a standstill.

As grocery store shelves go empty, the government is now asking the military to intervene and stop the farmer blockades.  However, the Dutch people overwhelmingly support the farmers.  Things have evolved into a social and economic war between the farmers and Build Back Better government ideology chasing climate change goals.

(Reuters) – Dutch farmers angered by government plans that may require them to use less fertilizer and reduce livestock began a day of protests in the Netherlands on Monday by blocking supermarket distribution hubs in several cities.

(more…)

John Kirby is the former Pentagon spokesperson who is now the National Security Council Coordinator for Strategic Communications.  The people in/around the White House have shifted Kirby, a very good spinner of parseltongue, into a place where he can give the media an impression of White House competency.

The LGBTQ, racially inclusive and woke checkbox hires are not up to the task of their positions.  Incompetence is running amok.  As a result, it is somewhat ironic and representative the Biden hypocrisy, that Kirby is needed to take the pressure away from administration checkbox hires.  In this interview Kirby defends the White House policy on the Russia-Ukraine war, interventionist and dependent foreign policy, and the energy policy that has resulted in high gas prices.

Video prompted to 04:05, where the topic of Biden’s upcoming visit to Saudi Arabia is discussed.  WATCH:

(more…)

Much has been made of comments by Federal Reserve Chairman Jerome Powell in his brief explanation of what the Fed got wrong.  Last week Powell made comments during a European Central Bank forum on bank policy, implying the absence of unvaccinated workers returning to the labor force is part of the US inflation problem.

Powell’s comments seem to align with the government vaccine mandate position which ignored the rights of the worker. Considering the responsibility of the Fed to anticipate price and labor issues, Powell’s sense of credulity toward those workers who dropped out of the labor force rather than inject an untested vaccine into their body is quite remarkable.  Inartful and arrogant are soft terms for his commentary.

However, there’s a bigger “tell” in the segment of what the Fed got wrong, when you listen to Powell talk about the supply side issues and how the Fed Reserve had no model to predict the mandated lockdowns, economic activity stoppages and consequences.   Notice how Powell completely dismisses the structural energy policy, the Build Back Better agenda, that lies at the heart of the current supply side inflation issue.  Video Prompted to 01:03:34, WATCH:

.

Throughout the discussion the primary focus to control inflation is reliant on a demand side cause.   The goal to reduce demand is seen as a way to mitigate and reduce inflation.  Thus, this worldview, as mistaken as it was/is, explains the justification for why the Fed waited to increase interest rates.  They never saw the radical energy policy as a structural driver of supply side inflation.

According to Powell, they thought the supply side issues would moderate quickly, without giving any consideration at all to how a radically new energy policy would embed.  He just ignores the issue completely; again, pretending not to know.  But perhaps it’s actually worse.  Perhaps he really doesn’t see a radical new energy policy as a driving force behind current inflation.  If that’s true, and he genuinely does not see it, then Fed policy in the future is going to make the recession much worse.

If you ignore massive energy price impacts, the FED will keep interest rates high despite demand dropping, and then eventually get to a place where demand has dropped so low the recession is deep, while turning toward each other and asking why are prices still so high?

Keep that disconnect in mind.

(more…)

If you look beyond the condescending, sanctimonious and unintelligent questioning and pantomime from CBS News Margaret Brennan, there are some very interesting aspects outlined by German Chancellor Olaf Scholz.  [Transcript Here] I was looking for how CBS would inject the pending global food shortage into the interview, and what narrative angle they would use.  The coordinated media political talking point, ‘Russia starving the world‘, comes up in the last third of the interview.

Germany is the largest and most heavily industrialized economy in the European Union (EU). As a result, Germany makes most of the decisions about how the EU operates. Former German Chancellor Angela Merkel always played the role of supporting NATO; however, her approach to government was one of the most closed, controlling and nationalist hypocrisies within the European Union.  If it was in Germany’s interest it was done. If it was not directly beneficial to Germany, it was never done.

Merkel’s replacement, Olaf Scholz, is not that different from his predecessor in regard to the economics of nationalism, the predominant view for any German leader. However, Scholz is more of a collaborator, an outward looking Chancellor; seemingly more globally and communally minded than Merkel. Scholz is more accepting of Biden (USA) influence than Angela Merkel was.  Scholz is also spending more on German military than Merkel would ever consider.

In this interview, Scholz outlines the conflict in Ukraine while overlaying his perspective of Russian President Vladimir Putin as an outcome of their discussions.  WATCH:

[Transcript] – MARGARET BRENNAN: Mr. Chancellor, thank you so much for making time in your busy schedule for us.

OLAF SCHOLZ: Good morning.

MARGARET BRENNAN: So I read your biographer says you don’t often answer directly, but I’m going to try my best today. You speak with Vladimir Putin. Do you think that Russia is a terrorist state as president Zelenskyy says?

(more…)

Two weeks ago, a NATO blockade of Kaliningrad, an outpost of Russia, was triggered when Lithuania blocked the transport of goods through Suwalki corridor.  According to the Lithuanian justification they were following through on NATO sanctions against Russian goods.  However, the escalation was very provocative toward Russia and discussions between Russia and NATO countries were tense.

Apparently, Germany was increasingly concerned the blockade was creating a scenario where Russian military were going to escort the transport of railroad goods to Kaliningrad, and that would lead to escalated military conflict with Russia. “German Chancellor Olaf Scholz is eager to avoid unnecessary provocations of Russia. He has repeatedly emphasized that he would do everything in his power to ensure that NATO does not become a party to the war between Russia and Ukraine. German soldiers are stationed in Lithuania and could become involved in a possible conflict.” {link}

The EU has now dropped the blockade and the transport of goods between Kaliningrad and Russia will resume.  The EU decision was made before the NATO meeting in Madrid concluded; however, it looks like NATO postponed the announcement until after Biden left in order to save face on the reversal of position.

GERMANY – The European Commission plans to issue a clarification that will allow Russia to resume sending supplies to the exclave of Kaliningrad via Lithuania. Berlin supports the idea, but some in Vilnius are not pleased.

[…] The move will put an end to a disagreement that had not only been a significant source of tension between Russia and Brussels – but also exposed deep rifts within the EU regarding the correct approach to Moscow.

(more…)

It is very curious timing in this article from Newsweek, containing massive geopolitical implications, using identified Saudi Arabia sources, would come in advance of Joe Biden’s visit to the Kingdom of Saudi Arabia.

Is this strategic geopolitical pressure from Saudi leader Mohamed Bin Salman (MbS) ahead of the meeting with Biden; or is this a genuine possibility that looms as likely?  If the former, then Joe Biden is being geopolitically slow roasted by Saudi Arabia for his previous disparagements and ideological hypocrisy in his visit.  If it is the latter, well, then the tectonic plates of international trade, banking and economics are about to shift directly under our American feet.

We have been closely monitoring the signs of a global cleaving around the energy sector taking place.  Essentially, western governments’ following the “Build Back Better” climate change agenda which stops using coal, oil and gas to power their economic engine, while the rest of the growing economic world continues using the more efficient and traditional forms of energy to power their economies.

This article from Newsweek is exactly about this dynamic with Saudi Arabia now potentially joining the BRICS team.

NEWSWEEK – Finland and Sweden’s green light to join NATO is set to bring about the U.S.-led Western military alliance’s largest expansion in decades. Meanwhile, the G7, consisting of NATO states and fellow U.S. ally Japan, has adopted a tougher line against Russia and China.

In the East, however, security and economy-focused blocs led by Beijing and Moscow are looking to take on new members of their own, including Iran and Saudi Arabia, two influential Middle Eastern rivals whose interest in shoring up cooperation on this new front could have a significant impact on global geopolitical balance.

The two bodies in question are the Shanghai Cooperation Organization (SCO) and BRICS. The former was established in 2001 as a six-member political, economic and military coalition including China, Russia and the Central Asian states of Kazakhstan, Kyrgyzstan and Tajikistan before recruiting South Asian nemeses India and Pakistan in 2017, while the latter is a grouping of emerging economic powers originally consisting of Brazil, Russia, India and China (BRIC) upon its inception 2006, and including South Africa in 2010.

Here is the money quote:

(more…)

Keep all of the Biden administration visits to the Port of Los Angeles, Port of Long Beach and Port of Oakland in mind (aka the hide the ships program) as you review this pending issue with port labor unions.   The labor union contracts expired at 5:00pm today.  Massive wage increases, the result of inflation, are demanded by the unions and White House is likely to get involved (if they are not already).

In a very weird economic scenario, the Biden administration actually benefits from a port stoppage as imports are a deduction to GDP and the U.S. economy is presumably on the “zero” growth bubble.   If the Bureau of Economic Analysis (BEA) calculates a negative GDP in the second quarter (not likely for political reasons), the Biden administration would officially be responsible for a recession.  [Any delay in import quantification helps shape the economic statistics; however, Q2 ended yesterday.]

Additionally, port infrastructure specialist, John D. Porcari, is part of the Biden administration economic team.  Porcari shaped the response to the import and supply chain crisis in 2021 that formed the hilarious ‘hide the ships’ strategy.   Porcari works to prop-up the insufferable Transportation Secretary Pete Buttigieg who has no idea what he’s doing.

CALIFORNIA – LOS ANGELES, July 1 (Reuters) – The contract covering more than 22,000 workers at 29 U.S. West Coast ports expires late on Friday, dialing up worries that labor disruption could roil the nation’s battered supply chains, stoke inflation and threaten a weakening economy.

(more…)