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David Watson's avatar

"China ... dismantling ill-considered solar farms that threaten productive agricultural land and water resources..."

As Hawkeye said in Thor, I'm starting to root for this guy.

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Sunshine's avatar

Nice analysis. The golden age of globalization does appear to be over. Trust is now in the process of collapse.

Zoltan Pozsar's recent dispatch "This is What the New World Order Will Look Like "After Europe's Minsky Moment "Where $2 trillion of German Value Depends on $20 billion of Russian Gas," parallels the logic of your analysis about Chinese concerns about food security.

Poszar argues that in 2022 global supply chains, whether they produce military or civilian goods are facing a Minsky moment (which during the 2008 financial crisis was about the implosion of the long-term intermediation chains of shadow banking, and is today about the implosion of the long-intermediation supply chains, whether food, chips, or artillery shells. The triggers aren't (as in 2008) a lack of liquidity and capital but instead a lack of inventory and protection, in a globalized production system where major countries design at home and manage from home, but source, produce and ship from abroad.

Pozsar claims that today inventory for supply chains is what liquidity was for banks in 2007-2008, when big banks ran "just-in-time" liquidity while presently big international firms run "just-in-time" supply chains, from which they had previously assumed that they could always source what they needed, without dramatically moving the price.

In 2007-2008 there was the Federal Reserve Bank, acting as the world's financial hegemon that managed to stabilize the financial crisis, however in 2022 the major political hegemon, the U.S, is being directly challenged by China and Russia with no clarity as to the depth of the ensuing instability which might occur.

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