- Cutting Americans’ lifestyles (to the bone)
- Sri Lanka: A near perfect ESG score… And for what?
- Ray Blanco’s semiconductor hot take
- (Supply-chain snafu) California almonds are in a “pickle”
- Plant-based insanity crops up in France
- “Tricky Dick” didn’t start the fire… The 5 is a “hidden gem”… Sorry not sorry for a typo… And more!
Almost one year ago, we featured a climate-change study that would have Americans cutting their lifestyles… to the bare bone.
The University of Leeds study was based on energy reductions required to “limit global warming to 1.5 C” per the Paris Agreement of 2015. And according to researchers…
- Americans would need to reduce total energy consumption by 90% to achieve a “low-energy society”
- The footprint of housing for a family of four: no more than 640 square feet
- “With respect to transportation and physical mobility, the average person would be limited to using the energy equivalent of 16–40 gallons of gasoline per year,” said an article at Reason
- Air travel would be restricted to one flight every three years
- “In addition, food consumption per capita… would be 2,100 calories per day,” Reason noted, cutting about 900 calories from the average American’s daily intake
- Researchers even went so far as to set a “clothing allowance” per person, equal to nine pounds annually
- And doing laundry would be restricted to just 20 times per year. Or once every 18.25 days for non-leap years.
Easy peasy, right? Leeds’ researcher Jefim Vogel confessed: “No country in the world accomplishes that — not even close,” he said.
Nonetheless, “sustainability experts” are determined to push their impractical agenda.
“It’s all being driven by massive policy and legal shifts from the top down,” said our resident geologist and mining expert Byron King last year, with alarming prescience.
“The U.S. and governments in countries around the world are imposing future bans… without fully thinking it through.
“Meanwhile, politicians have not fully considered the total life-cycle impact of [their] decisions,” he said. “They don’t factor in the difficulty of sourcing… materials, nor the environmental impact of mining things like exotic metals for batteries.
“The political focus on emitting less carbon from tailpipes” — for example — “is dangerously simplistic,” Byron argued. The outcome? “To reverse over 100 years of human progress in the U.S. [and] much of the rest of the world.”
And over the weekend, we had a front-row seat to the fallout resulting from “dangerously simplistic” policies in Sri Lanka.
The most glaring throughline from green politics to Sri Lanka’s collapse was the president’s abrupt command to adopt all-organic farming. With disastrous consequences…
In April 2021: “The government banned the use of chemical fertilizers and banned their importation. The move was pitched as creating a self-reliant economy on the island nation and hailed as a great experiment in green policy-making,” says an article at The National Review.
“After the fertilizer ban went into effect, rice production fell by 20% in only six months. The country had to import $450 million worth of rice to make up the difference, and rice prices still went up by 50%. Tea exports plummeted, costing the economy $425 million.”
While the government by and large repealed the fertilizer ban in November 2021, the inevitable devastation was done.
Sri Lanka was well on its way to fostering a thriving middle class, according to the World Bank in 2019. “Now millions could return to poverty as gas lines, food shortages and political unrest threaten to undo all that progress.”
Says The New York Times: “The economic crisis came to a head this weekend, as thousands of people stormed the official residence and office of the president, Gotabaya Rajapaksa, demanding his resignation. A breakaway mob burned down the private home of the prime minister.”
Both the president and prime minister have since resigned. And as we write, they are reportedly trying (unsuccessfully) to flee the country.
“The underlying reason for the fall of Sri Lanka is that its leaders… fell under the spell of Western green elites peddling organic agriculture and ‘ESG,’” says author Michael Shellenberger at Common Sense.
ESG “refers to investments” in “higher Environmental, Social and Governance criteria,” he adds. And get this: “Sri Lanka has a near-perfect ESG score of 98 — higher than Sweden (96) and the United States (51).
“What does having such a high ESG score mean? In short, it meant that Sri Lanka’s 2 million farmers were forced to stop using fertilizers and pesticides, laying waste to its critical agricultural sector…
“To be sure, there were other factors behind Sri Lanka’s fall,” says Shellenberger. Yes, COVID-19 lockdowns put a huge dent in tourism… as did the war in Ukraine. (Coincidentally, many Russians and Ukrainians vacation in Sri Lanka.)
Plus, the country fell victim to China’s “debt diplomacy,” leaving Sri Lanka billions in debt via Belt and Road Initiative loans. Untenable inflation — near 60% — was the final nail in the coffin.
“But the biggest problem was Sri Lanka’s chemical fertilizer ban, which… was central to the country’s effort to comply with ESG,” Shellenberger contends.
“Sri Lanka was the first developing country to come undone, but it will not be the last,” says The National Review. Laos, Zambia and Lebanon might follow in short order… Not to mention Western nations too.
The Dutch resistance movement, largely ignored by the media…
“Green agricultural policies and exceptionally poor leadership drove [Sri Lanka] to collapse faster than other developing countries, but the basic global factors that affected it will affect other[s] as well.”
Of course, this is a story with a long arc — and a lot of loose ends — but we’ll stay on top of it…
To the market today where the three major indexes are in the green… Leading the pack is the stodgy Dow, up 0.35% to 31,285. The S&P 500 and Nasdaq are negligibly positive at 3,855 and 11,375 respectively.
Checking in on commodities, oil is down $8 to $96.16 for a barrel of WTI, thanks to a strong dollar. And while we’re on the subject, the U.S. dollar and euro have reached parity — meaning the two currencies are of equal worth — for the first time in 20 years. But the strong dollar is no bueno for gold, down $3.70 to $1,728 per ounce while silver is just a hair under $19.
As for crypto, it’s getting kicked in the shin today: Bitcoin is down to $19,850 and Ethereum has slumped to $1,080.
For the major economic number of the day, the NFIB Small Business Optimism Index is abysmal. The headline number of 89.5 is even lower than during the spring lockdown two years ago; indeed, it’s the lowest reading since January 2013…
Expectations for the next six months set another record low in the survey’s 48-year history.
Inflation zoomed up as the single-most important problem facing business owners — cited by 28% of survey respondents last month, but 34% this month and the highest since 1980. Quality of labor is still up there at 23%, taxes at 11%… with all other concerns registering in the single digits.
“Chip stocks have been in a swoon since the beginning of the year,” says our science-and-technology authority Ray Blanco.
Benchmark sector ETFs — the VanEck Semiconductor ETF (SMH) and the iShares Semiconductor ETF (SOXX) — were each down almost 40% at the beginning of July.
Regardless, Ray expects semiconductor stocks to bounce meaningfully this week on “strong reports from some of the biggest semiconductor manufacturing companies out there”:
- Samsung: “The company reported a 21% increase in sales for the second quarter,” Ray says. “The strength in South Korea’s chipmaker, one of the world’s largest, sent the sector rallying”
- Taiwan Semiconductor Manufacturing Co.: “The company posted solid sales — representing a 44% jump over sales last year — to close out the second quarter of the year.” What’s more, the third quarter is expected to outperform, “thanks to the launch of new Apple products, which rely heavily on TSM’s advanced chips.
“These and other semiconductor companies are scrambling to increase capacity in the face of rising demand.
“Will the U.S. take advantage of this growth to re-establish itself as a semiconductor manufacturing powerhouse?” Ray asks.
“Right now, many expansion plans include massive new advanced chip fabs to be built in the U.S.” But some plans have been put on hold…
“It’s all up to the current Congress right now to pass the CHIPS Act,” says Ray, “a piece of industrial policy designed to invest more than $50 billion to restore critical semiconductor capacity. Whether the legislation passes or not this session remains to be seen.
“But one thing seems certain, the industry finds itself in a position of strength right now,” says Ray, and it’s a real contrarian opinion. “Semiconductors might have reached the bottom after a dismal first half of the year,” he concludes.
Supply chain snag of the day: “The powerhouse almond industry is in a pickle,” says The Los Angeles Times.
California almond farmers produce 82% of the world’s almonds; in fact, almonds are the Golden State’s No. 1 agricultural export. And farmers, of course, rely on shipping to reach some of the world’s most “robust” markets, including China, India, the UAE and the EU.
The problem for almond growers this year?
“Oceanic carriers discovered they could make twice as many annual round trips — and higher profit margins — by sending empty containers back to Asia to pick up more goods for export instead of waiting in port here to be loaded with… almonds.”
Historically, the Port of Oakland has been the gateway for almonds… Can you say months-long bottlenecks? Now almond producers are eyeing the Port of Los Angeles to get their nuts to market. (Mind out of the gutter, please.)
In the interim, over 1 billion pounds of almonds are idling in California warehouses. “We have plenty of almonds,” says almond purveyor David Phippen. “The problem is getting them to people who will pay for them.” Speaking of, the price of almonds has plummeted to just $2 per pound. (Any resemblance to your shopping experience is negligible.)
But if there is a silver lining for almond growers, it’s this: Almonds have a shelf life up to two years… And almonds segue to our next topic today — the almond lobby must be mighty powerful to get away with almond milk.
The 5 has long followed regulation-happy officialdom in their asinine quest to “protect” consumers. From cauliflower rice in Arkansas… to vegan butter in California…the plant-based insanity has cropped up in France (heh).
“France became the first European country to ban words that have been used to describe meats or fish… from being used for their meatless counterparts,” says an article at Food & Wine, including the words sausage, bacon and steak. (For whatever reason, the word burger dodged French regulators.)
Jean-François Guihard of the National Interprofessional Association for Livestock and Meat (INTERBEV) says: “[This] constitutes an essential step in favor of the transparency of information to the consumer as well as the preservation of our products.” Sure.
France’s decision comes on the heels of a similar episode of food-labeling tomfoolery in South Africa. “Its Food Safety Agency (FSA) [was ordered] to seize any plant-based products on store shelves that use now-banned ‘meaty’ terms to describe themselves.”
Impeccable timing. It’s almost as if there weren’t a global food shortage. Hmm… Let them eat almonds? Well, only if properly labeled.
“‘Tricky Dick’ did not start the draft in 1969, just the draft lottery,” a reader clarifies.
“I was drafted in 1967, along with tens of thousands of others, without the chance of drawing a high lottery number. Also, unless I slept through its repeal in the past few years, the draft law is still on the books, and all 18-year-old males are still required to register (no women allowed, and no complaining heard).
“My drill sergeant didn’t have problems with any of his charges, including draftees. Of course, the fact that he was around 6′ 4″, 250 lbs. and a member of the 101st Airborne might have worked to his advantage.
“Also, my sergeant major always said he preferred draftees because they just wanted to keep their heads down, do their jobs and get out of the service in good standing. Whereas enlistees often felt like they’d made a stupid mistake by believing enlistment ads and signing up for twice as long as draftees were in for.”
The 5: Yep, the Selective Service Act of 1917 still gives the U.S. president the power to draft soldiers. But this power hasn’t been used since the Vietnam War when the last American soldier was drafted on June 30, 1973… Here’s hoping it stays that way.
“You know, for a ‘free’ publication, The 5 often has some hidden gems…
“I can’t say how much I appreciated [yesterday’s] gold ($1,680) and silver ($18.50) support levels you provided. I’m about to add to my gold and silver stash, especially at these levels. Thanks! This current ‘gold inversion’ if you will, sets up for future gains with all this inflation going on.
“Now, as far as ground bugs on my food, sorry… I guess I’m just not environmentally correct?”
“Thanks for the chuckle,” says an eagle-eyed reader who calls herself an “Alaskan Yooper.”
“When I read, ‘National Guard and Reserve units in addition to singing bonuses,’ I got a much needed chuckle! The mental picture of an Army officer ‘bonus singing’ was too good to keep to myself!
“This summer, any unexpected chuckle is much appreciated. As always, I love The 5… for so many reasons.”
On occasion, a typo escapes into the wild, despite our best efforts. But if it brightened our reader’s day — who is dealing with Alaskan forest fires, she tells us — well then, sorry not sorry…
Try to have a good one, and we’ll be back with more tomorrow!
Best regards,
Emily Clancy
The 5 Min. Forecast
