Category Archives: markets

A Simple Solution

Posted on by
Reply

Even if it might be politically difficult and short-term expensive.

Recall that EU member Lithuania expressed support for the Republic of China and in naked retaliation, the People’s Republic of China imposed a nearly complete trade embargo on Lithuania and blocked import of any other EU member’s products that contained Lithuania-originated parts.

Now, a year later, the EU is haling the PRC into the WTO in a suit over that embargo. Be still, my heart.

There’s a better and more effective and permanent solution to this sort of behavior from the PRC.

A year later, Lithuania has learned that it can get along without trade with the PRC, and by that example, so has the EU (and so have the US and non-PRC Asia, come to that).

The solution includes these straightforward steps.

  • The rest of us increase our trade with Lithuania
  • The EU in particular, and the rest of us as well, stop trading with the PRC
  • All of us increase our trade with the RoC

Sadly, the parties involved make such moves politically difficult with their own fear of PRC retaliations. And certainly, through the middle-term, it would be economically expensive to locate and develop alternative markets and to move supply chain steps—from dirt in the ground to component parts to finished products—completely out of the PRC. However, once those transfers are completed, we’d all be better off politically and economically from no longer having our economies dependent on the good offices of an aggressive and acquisitive enemy nation.

The PRC’s behavior toward Lithuania and its attempt to extort Japan through withholding shipments of rare earths to that nation are just two examples of that benefit.

Isn’t This Interesting

Posted on by
Reply

There’s an oil tanker traffic jam at the Turkish Straits junction with the Black Sea. That jam is being caused by tanker insurers’ refusal to honor a Turkish demand that the tankers produce letters from their insurers assuring Turkey that the tankers’ Protection and Indemnity Insurance policies remain in effect following the G-7’s, EU’s, et al., imposition of a price cap on Russian oil that bars insurers from covering oil tankers carrying Russian oil for sale above the cap. The International Group of P&I Clubs provides 90%, by tonnage, of the policies covering the world’s oil tanker fleet.

That Club’s problem with that demand for proof of effectivity of its policies post-cap is this:

The insurers said they couldn’t agree to the Turkish request because it could lead them to violate sanctions….

Isn’t that rationale for the Club’s reluctance interesting. What sanctions do Club insurers think they might violate if their policies comply with the requirements of the cap? It’s certainly possible that Russian oil shippers and/or traders could lie to the insurers about the prices of their oil, but that just puts a premium on the insurers exercising due diligence before they issue their policies. And on refusing to insure further if the Russian shippers/traders are discovered after the fact to have lied.

Get Rid of the EV Subsidy Altogether

Posted on by
Reply

Allied and friendly governments object to the Biden administration’s battery-operated car tax subsidy requirements that these vehicles be assembled substantially in the US or they’re not eligible for the subsidy. That puts battery-operated cars assembled in Europe, Japan, and the Republic of Korea at a substantial disadvantage in the competition for sales in the US.

They’re right, but for a different reason than they think.

The Biden administration should get rid of the battery-operated car subsidies altogether. If battery-operated cars truly were ready for market, they’d need no subsidy: Americans would buy them on the merits of the cars. If we don’t want them, or don’t want them in large numbers, government intervention (via subsidies here) is no more appropriate than is government intervention in any other section of our free market marketplace.

Full stop.

Controlling

Posted on by
Reply

Naked self-promoting advertisement….

My latest (as of 22 Nov 22, anyway) Peter Hunt novel is out, available here.

Peter Hunt’s lady is brutally assaulted, and Hunt has to go after the mastermind who set the thing up.

Donahugh was involved in DPA Donason’s kidnapping and personally involved in her rape.
More quiet. Then Freyman said, “I’ll be handling the prosecution. Keep me current as this business proceeds.”
“Of course,” Jankuwicz said.
Freyman turned to me. “I’ve also heard about you. There will be persons to prosecute as this winds up?”
“Before I could answer, Jankuwicz said, ‘That depends on the perpetrators.'”

Jankuwicz drummed his fingers on his desk for a moment. Then he said to me, “What do you need from me?”
“‘Keep Freyman out of my way.’
“‘hat would be easier to do if you keep in mind what I said earlier.”

But that’s not all Hunt had to deal with. His pseudo-niece Trang Thi Thao is back and they’ve found a line on the…person…who bought her missing older sister, Trang Thi Khiem, for his personal use and through him they hope to locate her sister.

A thin mattress, only slightly more than a mat, covered in a dirty red sheet, was on the floor…. Suarez was standing on the other end of the mattress, trying to pull his pants up. He was still shirtless, his brown skin glistening with the sheen of his sweat in the light from the ceiling light bulbs. Bare light bulbs; the ceiling fixture had long since lost its cover. Clumps of dark hair spilling down over his ears from their original sweep back. Thick chest gone soft.
Another thin mattress, with no sheet at all or pillow, was on the floor, too…. The two mattresses filled most of the small room’s floor, leaving just enough space for the door to open when Suarez wanted in—or when it was kicked in. Half Pint was standing on the bare mattress, holding a small Asian girl in front of him. His bush of blond hair was messed and twisted. Big, striped t-shirt wadded on the mattress. The girl might have been Thao’s age when she’d been sent to me by Pilsner. She was pale and emaciated, so it was hard to tell. She was wearing a too-big, dirty, pale blue t-shirt that came to the tops of her thighs.

The Cost of Food

Posted on by
Reply

Saturday’s Wall Street Journal had an article centered on the difficulty of passing a farm bill that, among other things, continues subsidies for farmers. The article included some words on the bill’s food stamp program and funding, including this remark:

...SNAP, the food-stamps program is generally aimed at helping low-income households afford to buy food.

There are at least two ways to help low-income households afford to buy food. One is to restore work/train for work/school requirements to the program, which in the end, increases those families’ income.

The other way is to get rid of the ethanol subsidies and requirements. Converting food to fuel additives drives up the costs of a whole range of foods, creating a closed loop of increasingly expensive food driving increasing need for food stamps. Cut that out.

Getting rid of the subsidies will help the farmers, too, by encouraging them to grow more food more cheaply and with their lower cost (already significantly lower than the cost of farming in other nations), gain global market share. And more income for farmers.