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Even I can dimly percieve, in my peak-oil obsessed brain, that I'm an unholy pain in the ass on this subject - so now many can yawn, turn the page while muttering something about "broken records" "stopped clocks" and "neurotic doomsters". Apologies to Eric Janszen, who puts up wearily with frequent sniping about their editorial line on this topic. But ...
I keep saying it. Vanishingly small spare production capacity in petroleum is going to worsen (happening already, quite obviously), and that is going to goose inflation, big time. And in fact much more than that: production declines are going to become the defining component of inflation, in a mere five years.
You can't easily find many forward looking comments on this topic among these pages, although inflation is the single biggest theme in this community. The real universe here seems entirely financial.
It's certainly possible to get lumped in with the "sky is falling" doomsters who are breathlessly hatching plans for converting football stadiums to hydroponic farms, but this should certainly not be a major consideration to a genuinely inquiring community.
Adam Lass, the commentator below (Agora analyst / options service author) seems a competent options specialist. Certainly from what I've read of his he seems completely agnostic about any trendy 'movements' - instead he seems singlemindedly in pursuit of trading profits, and merely watches trends very closely to derive trade setups. His track record and market calls seem to have earned him a decent rep.
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China Has Its Eyes Set on the Stars. Its Feet, However, Are Stumbling a Bit.
by Adam Lass, WaveStrength Options Weekly
Think of it as the yin and the yang of the Chinese situation: On the expansive “yang” side of things, Beijing has just announced that China will build an entire new class of heavy duty cargo rockets capable of boosting payloads up to 25 tons into low Earth orbit.
This is darn near par with our own (admittedly 30-year-old) heavy lifting Space Shuttle’s 26-ton low earth orbit capability -- and miles beyond Europe’s Ariane 5’s sandbucket of 6-10 tons and the Russian Soyuz’s 3-ton throw-weight.
That 25-ton figure isn’t exactly what they will pull off in the beginning: As per Wu Yansheng, president of the China Academy of Launch Vehicle Technology (CALT), the Long March 5 rocket is still a ways off. For now, the Chinese will settle for launching their first lunar probe, Chang'e-1, named after a goddess who flew to the moon, on a Long March 3A capable of putting up some 5.4 tons.
But Long Marches require long-term planning, which supposedly is China’s strong point. What’s more, Wu claims that these new rockets will be designed using pollution-free technologies.
China Aerospace Science and Technology Corporation’s Ma Xingrui anticipates that the new generation of carrier rockets will launch within six to seven years. To accommodate them, the Chinese are building their fourth space launch center in Wenchang, in the southern island province of Hainan.
The Commission of Science Technology and Industry for National Defense’s Yu Liegui tells us that they expect to spend 4.5 billion yuan (US$600 million): “After completion, the base will meet the demands of China's space technology development and peaceful use of space for 30 to 50 years, and help achieve a rapid development for China's launch vehicle technology and a sustainable development for the country's aerospace.”
Now it’s all well and good to be looking toward the distant horizon with the intent of flinging your machine self at the stars. Shows real ambition. The question at hand though, is how you are going to do this when you can’t even gas up a long-distance semitruck?
This is the “yin” or contractive side of China: Right now, today, in Hefei, the capital of eastern Anhui Province, independent suppliers have pretty much run out of diesel fuel. The old government monopolies aren’t doing a heck of a lot better: Sinopec and PetroChina are rationing supplies what reserves they have left.
Hefei, located at the junction of the mighty (and mightily polluted) Fei and Yangtze Rivers, is the industrial center of the province, producing mostly heavy machinery, electronics, chemicals, steel, textiles and cigarettes.
Folks from the entire province crowd into town each week, looking for work. This keeps wages remarkably low, even compared to the usual Chinese standard. The average monthly wage is in the vicinity of 1000 RMB, or US$120.
And even this modest level of success is in danger of being choked off by the worst fuel crisis in two years. The country's top refiner has pledged to guarantee supplies to a market crippled by the gap between state-set pump prices and record crude markets.
Banners about town feature pledges from Sinopec to “work hard to resolve the diesel supply tightness.”
A station manager interviewed by the International Herald Tribune (once a mainstay of expats everywhere, but now a mere extension of The New York Times and Washington Post media empire) complained that: “We don't have diesel today. The supply has been quite spotty. Long lines in front of gas stations are very common these days in Hefei.
Usually stations set a limit of 50 or 100 Yuan worth of gas for each vehicle, on which trucks can barely run.”
This sort of rationing is spreading to such critical manufacturing hubs as Guangdong Fujian, Jiangsu and Zhejiang provinces.
The Trib reports that Zhengda Transportation in Guangzhou, the southern business capital, now needs a week to get goods to Beijing instead of the usual three days as drivers hunt for fuel.
The problem? State-set diesel and gasoline prices have not been raised since May 2006 lest they for fear that increases would exacerbate inflation and spark unrest. But these artificially low prices keep most production facilities operating at breakeven when crude oil is at $65 a barrel. $95 oil is simply bankrupting them.
So round and round spins the Chinese wheel, with sights set high while reality comes up a bit short.
_______________
I keep saying it. Vanishingly small spare production capacity in petroleum is going to worsen (happening already, quite obviously), and that is going to goose inflation, big time. And in fact much more than that: production declines are going to become the defining component of inflation, in a mere five years.
You can't easily find many forward looking comments on this topic among these pages, although inflation is the single biggest theme in this community. The real universe here seems entirely financial.
It's certainly possible to get lumped in with the "sky is falling" doomsters who are breathlessly hatching plans for converting football stadiums to hydroponic farms, but this should certainly not be a major consideration to a genuinely inquiring community.
Adam Lass, the commentator below (Agora analyst / options service author) seems a competent options specialist. Certainly from what I've read of his he seems completely agnostic about any trendy 'movements' - instead he seems singlemindedly in pursuit of trading profits, and merely watches trends very closely to derive trade setups. His track record and market calls seem to have earned him a decent rep.
_______________
China Has Its Eyes Set on the Stars. Its Feet, However, Are Stumbling a Bit.
by Adam Lass, WaveStrength Options Weekly
Think of it as the yin and the yang of the Chinese situation: On the expansive “yang” side of things, Beijing has just announced that China will build an entire new class of heavy duty cargo rockets capable of boosting payloads up to 25 tons into low Earth orbit.
This is darn near par with our own (admittedly 30-year-old) heavy lifting Space Shuttle’s 26-ton low earth orbit capability -- and miles beyond Europe’s Ariane 5’s sandbucket of 6-10 tons and the Russian Soyuz’s 3-ton throw-weight.
That 25-ton figure isn’t exactly what they will pull off in the beginning: As per Wu Yansheng, president of the China Academy of Launch Vehicle Technology (CALT), the Long March 5 rocket is still a ways off. For now, the Chinese will settle for launching their first lunar probe, Chang'e-1, named after a goddess who flew to the moon, on a Long March 3A capable of putting up some 5.4 tons.
But Long Marches require long-term planning, which supposedly is China’s strong point. What’s more, Wu claims that these new rockets will be designed using pollution-free technologies.
China Aerospace Science and Technology Corporation’s Ma Xingrui anticipates that the new generation of carrier rockets will launch within six to seven years. To accommodate them, the Chinese are building their fourth space launch center in Wenchang, in the southern island province of Hainan.
The Commission of Science Technology and Industry for National Defense’s Yu Liegui tells us that they expect to spend 4.5 billion yuan (US$600 million): “After completion, the base will meet the demands of China's space technology development and peaceful use of space for 30 to 50 years, and help achieve a rapid development for China's launch vehicle technology and a sustainable development for the country's aerospace.”
Now it’s all well and good to be looking toward the distant horizon with the intent of flinging your machine self at the stars. Shows real ambition. The question at hand though, is how you are going to do this when you can’t even gas up a long-distance semitruck?
This is the “yin” or contractive side of China: Right now, today, in Hefei, the capital of eastern Anhui Province, independent suppliers have pretty much run out of diesel fuel. The old government monopolies aren’t doing a heck of a lot better: Sinopec and PetroChina are rationing supplies what reserves they have left.
Hefei, located at the junction of the mighty (and mightily polluted) Fei and Yangtze Rivers, is the industrial center of the province, producing mostly heavy machinery, electronics, chemicals, steel, textiles and cigarettes.
Folks from the entire province crowd into town each week, looking for work. This keeps wages remarkably low, even compared to the usual Chinese standard. The average monthly wage is in the vicinity of 1000 RMB, or US$120.
And even this modest level of success is in danger of being choked off by the worst fuel crisis in two years. The country's top refiner has pledged to guarantee supplies to a market crippled by the gap between state-set pump prices and record crude markets.
Banners about town feature pledges from Sinopec to “work hard to resolve the diesel supply tightness.”
A station manager interviewed by the International Herald Tribune (once a mainstay of expats everywhere, but now a mere extension of The New York Times and Washington Post media empire) complained that: “We don't have diesel today. The supply has been quite spotty. Long lines in front of gas stations are very common these days in Hefei.
Usually stations set a limit of 50 or 100 Yuan worth of gas for each vehicle, on which trucks can barely run.”
This sort of rationing is spreading to such critical manufacturing hubs as Guangdong Fujian, Jiangsu and Zhejiang provinces.
The Trib reports that Zhengda Transportation in Guangzhou, the southern business capital, now needs a week to get goods to Beijing instead of the usual three days as drivers hunt for fuel.
The problem? State-set diesel and gasoline prices have not been raised since May 2006 lest they for fear that increases would exacerbate inflation and spark unrest. But these artificially low prices keep most production facilities operating at breakeven when crude oil is at $65 a barrel. $95 oil is simply bankrupting them.
So round and round spins the Chinese wheel, with sights set high while reality comes up a bit short.
_______________
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