And, no, not in Spain but in Japan.  And this despite Fukushima.

From Quoth the Raven at QTR’s Fringe Finance:

“Japan has been undecided over what to do about its nuclear power industry since the 2011 Fukushima plant disaster. It now says reactor restarts are key to meeting emissions targets as Japan tries to step up in the global effort against climate change . . . .” (my underscoring)

The decline you see in the above chart is OVER.  Japanese nuclear capacity will now start increasing.

While there are as yet no plans to build new reactors, the list below is of Japan’s RESTARTED REACTORS.  As you can see, Japan is serious.

Energy-poor Japan is treating its energy needs as importantly as it should.  In other words, it’s not waiting around for expensive and/or pie-in-the-sky “renewables.”

IT NEEDS CHEAP, RELIABLE POWER.

This piece from Lance Roberts is a worthwhile read.

40% of the Bull Market is Due Solely to Buybacks

Stock buybacks are another market distortion contributing to the CURRENT BUBBLE.

Until 1982, THEY WEREN’T EVEN LEGAL.

From the piece:

“The Market Should Be 40% Lower

The chart below via Pavilion Global Markets shows the impact stock buybacks have had on the market over the last decade. The decomposition of returns for the S&P 500 breaks down as follows:

• 21% from multiple expansion,

• 31.4% from earnings,

• 7.1% from dividends, and

• 40.5% from share buybacks.”

And here’s what Kurt Anderson had to say about buybacks in his excellent financial history of the US since 1980, Evil Geniuses:

“Essentially every CEO now does buybacks because everyone else does them. Their stock-price-based performance will be judged this quarter and this year against all those other CEOs, so it’s a mad recursive loop. How is the result not a stock market bubble — and extremely long lasting bubble but a bubble nevertheless? It’s unsustainable: you can take 10 percent of your company’s shares out of circulation, then 20 percent, then 30 percent or even (as IBM has done over the last two decades) 60 percent, but you can’t keep doing that forever.” (my underscoring)

JUST ANOTHER DISTORTION AT THE HEART OF THIS BUBBLE.

Back to Roberts:

“For investors betting on higher stock prices, the question is what happens if ‘stock buybacks’ reverse?”

YOU TELL ME.

It’s really in SHORT SUPPLY.

Free knowledge here.

And at the moment, EXTREMELY IMPORTANT.

Check it out.

But before you do, let me just jump ahead with two MONEY-SHOT stats:

1. In terms of energy density, one uranium pellet the size of a gummy bear = 120 gallons of oil.  Since there are 42 US liquid gallons in ONE BARREL of oil, and since one barrel of oil = 8 years of human physical labor, ONE PELLET of uranium x 2.86 barrels of oil (120 gallons) = 22.86 YEARS OF HUMAN PHYSICAL LABOR.
2. Generating a gigawatt of energy takes one square mile of land per nuclear reactor, whereas, alternatively, it takes 431 utility-scale wind turbines requiring 360 times more land.

BOYS AND GIRLS — Don’t look now, but WE’RE GOING NUCLEAR!

Said General Mark Milley:

“What we saw was a very significant event of a test of a hypersonic weapon system. And it is very concerning,” General Mark Milley, chairman of the Joint Chiefs of Staff, said in an interview for “The David Rubenstein Show: Peer-to-Peer Conversations” on Bloomberg Television. “I don’t know if it’s quite a Sputnik moment, but I think it’s very close to that. It has all of our attention.” 

THIS IS NOT YOUR FATHER’S — OR EVEN GRANDFATHER’S — COLD WAR. This is different.

From the 40s through the 80’s, the US was industrially paramount. Now, China is.

Like it or not, that changes things.

This is from the Heritage Foundation, so to a certain extent, the fix is in, but then judging from China’s and Russia’s advances in hypersonic weaponry plus China’s commitment to a FULLY MODERNIZED military, there are legitimate grounds for concern.

And to that, these graphics, in the main, attest.

ENVIRONMENTS

THREATS

US MILITARY POWER

Three concluding quotes to think about:

• “In the aggregate, the United States’ military posture continues to be rated ‘marginal’ and features both positive and negative trends . . .”
• “The 2022 Index concludes that the current U.S. military force is likely capable of meeting the demands of a single major regional conflict . . .”
• “As currently postured, the U.S. military continues to be only marginally able to meet the demands of defending America’s vital national interests.”

Contrast that to what Biden and others say, calling the US military, BY FAR, the most powerful force in the world.  We may have enjoyed that dominance at one time, but I doubt it’s any longer the case. And the graphs above show why.

Here’s the executive summary from which I copied them:

2022 Index of US Military Strength

 

This should be WOKEDOM’S emblem since it seeks to be at the center of UNPROVEN THEORY.

Depends.

Another powerful — AND INTENSELY LOGICAL — rebuttal of the notion that we can IMMEDIATELY START DECARBONIZING.  And it’s from Gail Tverberg, A BRILLIANT ACTUARY, who also knows a lot about energy.

Here’s her opening line — and it’s a SALVO:

“One of the great misconceptions of our time is the belief that we can move away from fossil fuels if we make suitable choices on fuels.”

She continues:

“The problem is the same regardless of what lower bound a person chooses: our economy is way too dependent on consuming an amount of energy that grows with each added human participant in the economy. This added energy is necessary because each person needs food, transportation, housing, and clothing, all of which are dependent upon energy consumption. The economy operates under the laws of physics, and history shows disturbing outcomes if energy consumption per capita declines.“ (my italics and underscoring)

Fleshing out this claim, she writes — and this is verbatim:

• The impact of alternative energy sources is smaller than commonly believed.

• When countries have reduced their energy consumption per capita by significant amounts, the results have been very unsatisfactory.

• Energy consumption plays a bigger role in our lives than most of us imagine.

• It seems likely that fossil fuels will leave us before we can leave them.

• The timing of when fossil fuels will leave us seems to depend on when central banks lose their ability to stimulate the economy through lower interest rates.

• If fossil fuels leave us, the result could be the collapse of financial systems and governments.

Here’s the entire piece:

The True Feasibility of Moving Away from Fossil Fuels

And here are the eight prongs of her thesis — again in her words:

• [1] Wind, water and solar provide only a small share of energy consumption today; any transition to the use of renewables alone would have huge repercussions.

• 

• [2] Venezuela’s example (Figure 1, above) illustrates that even if a country has an above average contribution of renewables, plus significant oil reserves, it can still have major problems.

• [3] When individual countries have experienced cutbacks in their energy consumption per capita, the effects have generally been extremely disruptive, even with cutbacks far more modest than the target level of 80% to 90% that we would need to get off fossil fuels. (my underscoring)

• [4] Most people are surprised to learn that energy is required for every part of the economy. When adequate energy is not available, an economy is likely to first shrink back in recession; eventually, it may collapse entirely. (my underscoring)

• [5] If the supply of energy to an economy is reduced for any reason, the result tends to be very disruptive . . . .

• [6] Most people assume that moving away from fossil fuels is something we can choose to do with whatever timing we would like. I would argue that we are not in charge of the process. Instead, fossil fuels will leave us when we lose the ability to reduce interest rates sufficiently to keep oil and other fossil fuel prices high enough for energy producers. (my underscoring)

• [7] Once we hit the “no more stimulus impasse,” fossil fuels will begin leaving us because prices will fall too low for companies extracting these fuels. They will be forced to leave because they cannot make an adequate profit. (my underscoring)

• [8] Conclusion: We can’t know exactly what is ahead, but it is clear that moving away from fossil fuels will be far more destructive of our current economy than nearly everyone expects. (my underscoring)

For those who haven’t figured it out, we’re charging into that dreaded box canyon with Colonel Thursday.  Even as we parse pronouns, multiply genders, weaponize “theories” and LIVE LIKE THERE’S NO TOMORROW.

Folks, it’s this simple:

“Once the Federal Reserve and other central banks lose their ability to cut interest rates further to support the need for ever-rising oil prices, the danger is that oil and other commodity prices will fall too low for producers.”

ZERO INTEREST RATES,  ZERO PRODUCTION, ZERO OIL, ZERO ECONOMY.

This comes from David Hay at Evergreen Gavekal.  It’s one of the best and most comprehensive pieces I’ve seen on the MIRAGE that is the SEAMLESS TRANSITION FROM CARBON TO GREEN.

Green Energy: A Bubble in Unrealistic Expectations?

Here’s the piece’s own bullets, but then read the text itself.  There aren’t any CLIMATE UTOPIAS.

• BlackRock’s CEO recently admitted that, despite what many are opining, the green energy transition is nearly certain to be inflationary.
• Even though it’s early in the year, energy prices are already experiencing unprecedented spikes in Europe and Asia, but most Americans are unaware of the severity.
• To that point, many British residents being faced with the fact that they may need to ration heat and could be faced with the chilling reality that lives could be lost if this winter is as cold as forecasters are predicting.
• Because of the huge increase in energy prices, inflation in the eurozone recently hit a 13-year high, heavily driven by natural gas prices on the Continent that are the equivalent of $200 oil.
• It used to be that the cure for extreme prices was extreme prices, but these days I’m not so sure.  Oil and gas producers are very wary of making long-term investments to develop new resources given the hostility to their industry and shareholder pressure to minimize outlays.
• I expect global supply to peak sometime next year and a major supply deficit looks inevitable as global demand returns to normal.
• In Norway, almost 2/3 of all new vehicle sales are of the electric variety (EVs) – a huge increase in just over a decade. Meanwhile, in the US, it’s only about 2%. Still, given Norway’s penchant for the plug-in auto, the demand for oil has not declined.
• China, despite being the largest market by far for electric vehicles, is still projected to consume an enormous and rising amount of oil in the future.

CARBON WILL BE WITH US FOR A VERY LONG TIME.