Globalization As We Know It Is Coming To An End -- March 28, 2022

China's energy crisis: is China "managing" its energy crisis through Covid-19 "management"? It's an interesting question being asked more often. Shenzehn was shut down for Covid but that shutdown lasted only five days when Apple et al weighed in. Now, Shanghai.

Link here.

For now, the answer to that question does not bother me. What bothers me is that, yes, China can manipulate the world economy by simply shutting down one of its mega-cities. China must have at least twenty mega-citiees.

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Globalization As We Know It Is Coming To An End

I was aware some time ago that globalization would not go well, but I am surprised by how much was written about that which I failed to notice. Those articles must have been in obscure economic journals or the Harvard Business Review but now they are appearing daily in mainstream media either as news articles or op-eds.

For me, globalization began during the Clinton presidency, 1993 - 2001. So, 2000 ... two decades later.

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How Putin's War Is Fast Changing Our Energy Future

It will be interesting to see if the Ukraine-Russian war becomes known as "Putin's War." If so, we have, like the "world wars," a Putin War I, a Putin War II, etc. 

Link here.

Seven emerging realities that will alter our lives as global connections fray. 

• Europe remains heavily dependent on Russian fossil fuels.
• Petrostates are dysfunctional states prone to starting wars.
• Oil shocks create economic recessions.
• The next domino is a fertilizer crisis.
• The global ties threatened by Putin's war have already reduced local energy security.
• The green transition already faced daunting challenges.
• The political groundwork has not been done to prepare the public for lower consumption.

EVs: Electric cars depend on the mining of copper, aluminum, chromium, lithium, lead and other minerals. Oil powers the mining of these minerals while mining accounts for 10 per cent of the global greenhouse gas emissions. On average an electric vehicle requires 183 pounds of copper. As both oil and copper become more expensive to mine, the price of electric vehicles will climb. (An added conundrum: China mines and uses half of the world’s copper.)  

This is why EV investing is not for me. EVs may take over the world; we may see 100% EV penetration, but not in my investing lifetime, and the margin on these vehicles and the cost of getting to 100% penetration will be pretty much shouldered by automobile manufacturers. EV stocks may be a great trading opportunity; they may even be a great investing opportunity, but there are so many other better plays. 

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