- Switzerland threatens Tesla owners
- “The damage is done”: Jim Rickards on oil and gas
- Market drinks the eggnog
- A macabre traffic jam in Beijing
- Ray Blanco on a space stock’s “unique niche”
- [JFK documents] Why NOT now?
“Switzerland has long been a top market for electric vehicle adoption,” notes CleanTechnica — a fact which could backfire massively on the famously neutral Playground of Europe.
“The bestselling automobile in Switzerland is now the Tesla Model Y. That’s not just electric cars, and it’s not just one month — it’s for the first nine months of 2022.
Source: CleanTechnica
“Furthermore, the Model Y’s older but somewhat smaller sibling, the Model 3, is the third bestselling automobile in [Switzerland],” says CleanTechnica. In fact, sales of Tesla EVs were up more than 50% in the first three quarters of 2022.
But back to that massive backfire: On Nov. 23, Switzerland’s Federal Council announced “measures to be taken in the event of a power shortage.”
“Electric cars could be banned from making nonessential journeys in Switzerland this winter,” The Telegraph reports.
“Due to its reliance on imports to sustain the country through the colder months,” the article continues, “Switzerland is bracing for an energy crisis this winter.”
A little background: Switzerland has been phasing out nuclear energy, and hydroelectric power now generates 60% of the country’s total electricity. During wet, rainy months of the year, the country typically has a surplus of electricity, but during the winter, Switzerland relies on European neighbors for energy imports.
But what happens when your neighbors sanction energy-rich Russia because of Ukraine’s invasion and they have no energy to export, much less to keep their own citizens from freezing to death? (By the way, it turns out historically neutral Switzerland is, um, not so neutral. The country stands with Ukraine in an act of self-sanctioning Russia.)
All to say, by the end of November, Switzerland was putting just-in-case contingency plans in place to ration energy this winter, and one energy-saving measure would see EVs sidelined for anything other than “essential” travel.
“No combination of wind turbines and solar modules” — or hydroelectric power, in Switzerland’s case — “can provide the baseload of electricity to maintain a modern power grid,” says Paradigm’s macro expert Jim Rickards.
“Batteries are not a solution because the quantities of nickel, lithium, copper and other strategic inputs cannot be mined in sufficient quantities to manufacture more than a small percentage of the storage capacity needed to convert intermittent power sources into reliable flows.”
And what seems to get lost in the battery-storage discussion, Jim notes: “The energy needed to conduct the mining is greater than the energy stored in the resulting batteries.” Meaning, the “juice” literally isn’t worth the squeeze…
Then “there is the problem of disposing of the batteries, which wear out in about eight–10 years and are loaded with poisonous chemicals.”
Great for the environment, right?
Nevertheless, “climate hysteria is a major constraint on new oil and gas output,” Jim says, but “it is not the only one.”
Namely, he expects the war in Ukraine to “drag on” for another year or more “unless the Kyiv regime collapses before then.
“Another constraint on oil output,” Jim says, “is the recent decision by OPEC+,” — which includes Russia — “to reduce output to support prices for the foreseeable future.” Plus? “Continued oil embargoes on exports of oil by Iran and Syria led by the United States are another drag on output.”
Adding insult to injury, in the last 24 hours, the EU imposed price caps on natural gas for one year, starting Feb. 15. “Prices will be limited if they breach 180 euros per megawatt hour for three days running,” the BBC reports.
“Once the cap is activated, gas across the bloc will have to be sold at a level equivalent to or below the global price of liquified natural gas (LNG), plus 35 euros,” says BBC. “This will last for at least 20 working days, the [European Council] said, although the cap could be automatically deactivated if prices fell again.”
Jim forecasts: “These price caps will fail as they always do, but they will create disruption in shipping lanes and oil export infrastructure in the meantime….
“Of course,” Jim recounts, “[there’s] the litany of Biden administration damage to the oil and gas supply beginning with the termination of the Keystone XL pipeline, greatly constraining new oil and gas exploration permits on federal lands, handicapping the fracking industry with new regulations and more.
“That’s a recipe for higher prices,” says Jim. Never mind that “the world will depend on oil and natural gas far into the future.
“According to my research,” he says, “Joe Biden has already set in motion a devastating series of events thanks to his party’s radical ‘green’ policies.
“Whether it’s massive increases in gas prices, dwindling diesel and heating oil supplies or billions in EV, solar and wind-power giveaways, Biden’s policies have set us up for a bleak Christmas this year,” Jim says.
[Are $1,000 monthly energy bills right around the corner? Jim and his team think so…
That’s why Jim is reaching out today to help our readers opt out of what he calls Team Biden’s “Green New Scam.”
Jim reveals everything in a timely video recorded just outside Washington, D.C., and he’s urging readers to take action before TOMORROW, Dec. 21.
Your bank account will thank you… Click here to view Jim’s warning now.]
Mr. Market is getting into the holiday spirit today… All three major U.S. indexes are in the green with the Dow ramping up 0.65% to 32,970, and the S&P 500 (+0.45%) and even the techie Nasdaq (+0.30%) following suit.
Commodities? Oil’s up 0.75% to $75.77 for a barrel of West Texas crude. When it comes to precious metals, silver’s the hot topic — up almost 5% and above $24. Gold, too, is getting some love, up 1.5% to $1,825 per ounce.
As for Bitcoin and Ethereum, they’re both in the positive at the time of writing, up to $16,825 and $1,215 respectively.
For the record, the Bank of Japan made a shock interest rate increase late last night (U.S. time). With that, all the major central banks of the world are now in tightening mode, which is pushing up bond yields. Today, the 10-year Treasury note is up to 3.68% — the highest all month.
As for the major economic number of the day, housing starts came in better than economists expected. Still, starts of new homes fell 0.5% in November.
But permits, signaling future building, fell way below consensus, dropping 11.2% year-over-year. When stripping out permits for single-family homes only, they dropped 7.1% annually. “Residential construction has been slowing,” Econoday summarizes, “and slowing significantly.”
“Meanwhile,” Bloomberg reports a glimmer of hope, “the number of homes completed jumped nearly 11% to an annualized 1.49 million, the highest since August 2007 and a sign builders are making greater progress on backlogs amid a demand pullback.”
We’ll see if millennial buyers swoop in — mortgage interest rates be damned — as Zach Scheidt predicted late last week.
“Since the abrupt dismantling of the stringent zero-COVID regime, cases have skyrocketed in China,” The Guardian comments. “A full picture of the impact is difficult to gauge. Authorities have conceded it is ‘impossible’ for the testing system to keep track.”
But Paradigm’s own fluent-in-Mandarin China hand, Chris Scott, reports: “China has ground testing to a halt — no tests, no positive cases to record! There are indications, that in just a matter of days, COVID-19 has spread to all corners of China.
“Accounts across social media, and among my contacts, confirm a sense that everyone has already caught the bug,” Chris says. “My in-laws in Luzhou, a city that had yet to see a major outbreak, all have COVID as of this week, including my wife’s 80-year-old aunt, who is now hospitalized.
“While Beijing reported only a handful of deaths this week, hearses are backed up at the city’s crematoriums. This is in the capital city, which has the best health care of any city in China, so outcomes elsewhere will be more grim.
“On the flip side,” says Chris, “streets in some cities are filling up again after the initial shock of opening up had many staying indoors voluntarily. And with so many of the COVID-positive encouraged to tough it out at home, there haven’t been scenes of overrun hospitals (beware of old videos circulating that are from the earlier outbreak in Wuhan in 2020).” Good to know.
“So from the standpoint of China’s economy, there’s a chance this could blow over — but not without a big death toll,” Chris concludes.
“Maxar Technologies (NYSE: MAXR) has carved out a unique niche in the space ecosystem,” says Paradigm’s science-and-tech maven Ray Blanco.
“The company is a specialist in manufacturing satellites and satellite components — including rover components currently on the surface of Mars,” he says. “But in recent years, the company has become a major operator of a constellation of [satellites] observing asteroids.”
This year, “those satellites have become very popular as a way to monitor the situation on the ground in Ukraine,” Ray says.
“Many if not most of the overhead battlefield pictures you’ve seen in the media [are] via Maxar’s eyes in the skies.
“Maxar has long been one of my favorite space technology plays,” he notes. “We added it to our Technology Profits Confidential watchlist in May 2020 as a way to play the surging space-based satellite communications industry.”
Ray held that SpaceX wasn’t the only game in town when it came to launching a series of low Earth orbit (LEO) broadband satellites. “We figured it was a good bet that Maxar could load up on manufacturing and consulting contracts,” he says. “Last year, we upgraded MAXR to an official pick in the Technology Profits Confidential model portfolio.
“Shares of MAXR haven’t had such a great year,” Ray concedes, “as is the case with many space names, but last week, that move was a huge winner. Shares more than doubled Friday on acquisition news!
“Maxar is getting bought out and taken private at a huge premium of 129% to Thursday’s closing price,” he says. “The $53 per share cash deal puts us up 76% over our original entry price and furnishes us with a great profitable exit from this space play.”
Congrats to Ray and his team for a banger recommendation! Stay tuned for more investable angles in the year ahead…
“The real question for me is why now?” a reader comments on yesterday’s episode of The 5, covering the Deep State, JFK and more.
“Why release the JFK documents now, particularly when we are being told that the people responsible are ‘outside the USA’ (meaning Russia)? Why do they want us to start hating Russia more NOW? Obvious, no?”
The 5:No doubt the mainstream media have stoked new Cold War-level hostility toward the Russkies for the better part of six years. But Dave’s deft treatment yesterday more questioned the Deep State’s involvement in JFK’s assassination rather than the USSR’s — Lee Harvey Oswald’s ties notwithstanding.
But even on that point, Jefferson Morley, at his Substack JFK Facts, says: “The [Warren] Commission’s investigation was superficial and uninformed, especially on Oswald’s visit to Mexico City and CIA plots to kill Castro in 1963.
“Questions now focus on CIA officials who knew about Oswald while JFK was alive,” Morley says, “and [the] CIA still doesn’t feel like answering them.”
But almost 60 years after a head of state’s murder — in broad daylight — the more salient question is: Why not now? It’s about time an unaccountable quasi state gets dragged out of the shadows.
An American can dream, right?
Take care, and we’ll be back tomorrow!
Best regards,
Emily Clancy
The 5 Min. Forecast
