Peak Oil News and Message Boards

Pops wrote:

theluckycountry wrote:And what are seeing? A breakdown of the complex international shipping system and of the national shipping system.

No, what we're seeing is a massive increase in consumption as people stayed home and shopped with government checks.
26,000,000 containers arrived in the US last year, an 18% increase over 2020 & 2019
China is building double the new containers, 6,000,000—that is not the sign of collapse.

It isn't anything like a breakdown, it is exactly the opposite.

It's the same with the chip "shortage" it isn't falling it just isn't keeping up with demand. Auto makers killed all of their orders early in the pandemic and we're surprised with how little demand fell, again as people sit home and buy stuff.

The problem with JIT is its inflexibility and we're seeing and paying for it big time. But don't mistake this for some great cascading societal collapse... that comes later. LOL

I don't see this as an either this or that situation. You are both correct. We are seeing both transportation, storage, distribution, and other problems, caused by the pandemic, trade wars, and countermeasures, and also a major increase in international trade. Chinese international trade volumes increased more than 20% last year, year on year, and China is the largest trading nation in the whole world. We are experiencing both an increase in international trade and very serious disruptions to it at the same time.

Pops is correct in his observation about car manufacturers and chips, but the semiconductors problem is much bigger than that. There is a chip war going on. The USA started it to try to weaken China. That was a moronic move. It won't work. The Chinese are investing a fortune on this now. This week the Russians and the Chinese started talking about increasing strategic cooperation in creating an independent, self sufficient, semiconductor manufacturing supply chain. This will become part of their strategic cooperation on aviation, military, and space. The Chinese have been rumored for a few years to be developing a domestic alternative to EUV lithography to manufacture chips, though I haven't seen any evidence of this yet.

I believe the Chinese government may be disrupting trade with the USA and some other Western nations, particularly sea shipping, on purpose to increase costs for their consumers, raise US prices to increase inflation, and encourage the US government to get rid of tariffs and other trade sanctions. Trade by rail in Eurasia hasn't been disrupted the same way, particularly with BRI countries. Chinese trade with BRI nations grew dramatically last year, but some countries, particularly the USA and Australia, are being punished by the Chinese for their aggressive foreign policies towards China. I expect this to continue after the pandemic is over. China is focused on developing its domestic market and trading more with, and investing more in, BRI nations, Asia, Africa, and Latin America. China is making itself less sensitive to US sanctions.

I work in the electronics industry, so I know something about electronic components shortages.

It's the same with the chip "shortage" it isn't falling it just isn't keeping up with demand.

It isn't as benign as that. Chips failing to keep up with demand has been happening all the time in the electronics industry since chips were invented. But lately, shortages are the norm rather than the exception. For the last five years, there's always been shortages of some kind or other, and they're still expected to continue for the foreseeable future. Personally, I find it more worrying when capacitor shortages started happening. Capacitors don't require terribly high-tech manufacturing, and the raw materials cost almost nothing. I hunted down the reasons, and it's because capacitors are only manufactured in very few factories now, and because they are very cheap components, the factories think very hard before increasing capacity, the profit margins are that thin.

This week the Russians and the Chinese started talking about increasing strategic cooperation in creating an independent, self sufficient, semiconductor manufacturing supply chain.

Not sure what this means, but I can give the most likely interpretations. This almost certainly comes from Russian news sources (the language they use is rather typical). So in all probability it just means that Russia is increasing the semiconductors it's buying from China and decreasing the ones it gets from everywhere else, which would be rather expected behavior from Russia.

Another thing it might mean is that the Chinese themselves are thinking of becoming self-sufficient in semiconductor manufacturing. This would be rather interesting, because it would mean that they are trying to do domestically a lot of the stuff they are now importing from Taiwan, Korea and Japan. If anybody thinks that the USA is still a significant player in semiconductor manufacturing, please inform yourself and abandon that notion. That stopped a long time ago.

It might also mean that the Chinese are thinking of increasing the amount of semiconductor design they do domestically. A lot of semiconductor design these days is done in the USA and Europe. USA and Europe like to fool themselves that the Chinese are somehow incapable of designing semiconductors, which is of course nonsense. It's only that historically, USA and Europe have kept a tight lid on their designs, and they are complex enough that attempting to re-create them from scratch or reverse engineering is a rather difficult task. But with enough determination, the Chinese might have the makings of a mostly self-sufficient semiconductor industry, from the very bottom (extraction of rare earth minerals) to the very top (design). And if they did, they would be the only nation on Earth with that capability. Which would mean that, in the case of a global supply chain collapse, the Chinese would still have electronic gadgets, and everybody else would have whatever the Chinese let them have.

On the topic of the thread, the worst part of increasing the number of chips in everything is that in a crunch, where economics keep me from tossing whatever and just buying another, all those chips and sensors and controls make everything unrepairable. Its not just "right to repair" (everything from iPhones to John Deeres) it is that those things are unrepairable.

I used to have a lot of pre-1960s tools and stuff for just that reason.

Doly wrote:

This week the Russians and the Chinese started talking about increasing strategic cooperation in creating an independent, self sufficient, semiconductor manufacturing supply chain.

Not sure what this means, but I can give the most likely interpretations. This almost certainly comes from Russian news sources (the language they use is rather typical). So, in all probability it just means that Russia is increasing the semiconductors it's buying from China and decreasing the ones it gets from everywhere else, which would be rather expected behavior from Russia.

Another thing it might mean is that the Chinese themselves are thinking of becoming self-sufficient in semiconductor manufacturing. This would be rather interesting, because it would mean that they are trying to do domestically a lot of the stuff they are now importing from Taiwan, Korea and Japan. If anybody thinks that the USA is still a significant player in semiconductor manufacturing, please inform yourself and abandon that notion. That stopped a long time ago.

It might also mean that the Chinese are thinking of increasing the amount of semiconductor design they do domestically. A lot of semiconductors design these days is done in the USA and Europe. USA and Europe like to fool themselves that the Chinese are somehow incapable of designing semiconductors, which is of course nonsense. It's only that historically, USA and Europe have kept a tight lid on their designs, and they are complex enough that attempting to re-create them from scratch or reverse engineering is a rather difficult task. But with enough determination, the Chinese might have the makings of a mostly self-sufficient semiconductor industry, from the very bottom (extraction of rare earth minerals) to the very top (design). And if they did, they would be the only nation on Earth with that capability. Which would mean that, in the case of a global supply chain collapse, the Chinese would still have electronic gadgets, and everybody else would have whatever the Chinese let them have.

It came from both Russian and Chinese media. Your second and third paragraphs are close to the general idea. the Chinese intend to create a FULLY self sufficient semiconductors manufacturing supply chain, including design, by the end of this decade. They intend to do this by developing domestic alternative technologies to EUV lithography, not reverse engineering. Their development of these technologies is, AFAIK, the most guarded Chinese secret. They've repeatedly said they are doing it but have never given any info on what it is they are doing exactly.

This is a Chinese article published today on the subject:
"GT Voice: China needs to develop own edge in semiconductor contest"
https://www.globaltimes.cn/page/202201/1250094.shtml


I expect them to achieve their goal no later than in 2035, and probably much earlier, as long as there are no major disruptions in China in the meantime. The issue is 7nm and smaller chips.

This is very important to China. IIRC, China imports around US$ 300 billions of semiconductors per year, their largest imports category.

Pops wrote:On the topic of the thread, the worst part of increasing the number of chips in everything is that in a crunch, where economics keep me from tossing whatever and just buying another, all those chips and sensors and controls make everything unrepairable. Its not just "right to repair" (everything from iPhones to John Deeres) it is that those things are unrepairable.

I used to have a lot of pre-1960s tools and stuff for just that reason.

I totally agree with you on this, Pops. I still hold on to my old incandescent lightbulb Mag flashlights for this reason, though I have an assortment of LED ones. And I am looking for an antique motorcycle, probably a 50s Norton or a Triumph, for my farm in Uruguay as an alternative to my electric Zero motorcycle and electric bikes. And a 1950s Land Rover Defender is on my wish list, too.

Doly wrote:I work in the electronics industry, so I know something about electronic components shortages.

It's the same with the chip "shortage" it isn't falling it just isn't keeping up with demand.

It isn't as benign as that. Chips failing to keep up with demand has been happening all the time in the electronics industry since chips were invented. But lately, shortages are the norm rather than the exception. For the last five years, there's always been shortages of some kind or other, and they're still expected to continue for the foreseeable future. Personally, I find it more worrying when capacitor shortages started happening. Capacitors don't require terribly high-tech manufacturing, and the raw materials cost almost nothing. I hunted down the reasons, and it's because capacitors are only manufactured in very few factories now, and because they are very cheap components, the factories think very hard before increasing capacity, the profit margins are that thin.

This week the Russians and the Chinese started talking about increasing strategic cooperation in creating an independent, self sufficient, semiconductor manufacturing supply chain.

Not sure what this means, but I can give the most likely interpretations. This almost certainly comes from Russian news sources (the language they use is rather typical). So in all probability it just means that Russia is increasing the semiconductors it's buying from China and decreasing the ones it gets from everywhere else, which would be rather expected behavior from Russia.

Another thing it might mean is that the Chinese themselves are thinking of becoming self-sufficient in semiconductor manufacturing. This would be rather interesting, because it would mean that they are trying to do domestically a lot of the stuff they are now importing from Taiwan, Korea and Japan. If anybody thinks that the USA is still a significant player in semiconductor manufacturing, please inform yourself and abandon that notion. That stopped a long time ago.

It might also mean that the Chinese are thinking of increasing the amount of semiconductor design they do domestically. A lot of semiconductor design these days is done in the USA and Europe. USA and Europe like to fool themselves that the Chinese are somehow incapable of designing semiconductors, which is of course nonsense. It's only that historically, USA and Europe have kept a tight lid on their designs, and they are complex enough that attempting to re-create them from scratch or reverse engineering is a rather difficult task. But with enough determination, the Chinese might have the makings of a mostly self-sufficient semiconductor industry, from the very bottom (extraction of rare earth minerals) to the very top (design). And if they did, they would be the only nation on Earth with that capability. Which would mean that, in the case of a global supply chain collapse, the Chinese would still have electronic gadgets, and everybody else would have whatever the Chinese let them have.

China spends more dollars purchasing chips (while China can design the chips it needs the likes of Tiawan TSMC to fabricate the designs etc) from the West than it does buying oil from the ME.... Essentially, in the digital age of the 4th industrial revolution, IC/chips are the new oil and America's chokehold of the semiconductor industry is the new OPEC.

So China has no choice but to become fully self sufficient in the entire stack, from the rare earth all the way up to the making of the chips, and including the firmware, software, and the entire platform and ecosystem.... This is why Huawei is investing heavily in its own chip fabs, as well as it own Operating system called Harmony and not to mention its own app gallery platform...

The US is forcing TSMC to tech transfer to its Arizona fabs that will be up in a few years, because the writing is on the wall, if China takes back Taiwan then the entire American economy/tech sector is SOL. So you are seeing a massive reshoring of the critical supply chain infrastructure

So this tech war will be determined by the race to see which side can become wholly self sufficient first, whilst both sides try to pull the rug from out underneath the other feet's first. Right now, for all intents and purposes, Korea and Japan are on team USA, so whatever chip abilities and capacity they have, its really adds to American bottom line (as they are willing vassals of the empire) and so is Tiawan, although Taiwan is a chesspiece that can easily flip if China decides to take them back.

JuanP wrote:

Pops wrote:On the topic of the thread, the worst part of increasing the number of chips in everything is that in a crunch, where economics keep me from tossing whatever and just buying another, all those chips and sensors and controls make everything unrepairable. Its not just "right to repair" (everything from iPhones to John Deeres) it is that those things are unrepairable.

I used to have a lot of pre-1960s tools and stuff for just that reason.

I totally agree with you on this, Pops. I still hold on to my old incandescent lightbulb Mag flashlights for this reason, though I have an assortment of LED ones. And I am looking for an antique motorcycle, probably a 50s Norton or a Triumph, for my farm in Uruguay as an alternative to my electric Zero motorcycle and electric bikes. And a 1950s Land Rover Defender is on my wish list, too.

So TSMC the Tiawanese chip fab that creates everything from nvidia gpu chips to the chip in your iphone etc is nothing without the specialized very expensive export controlled EUV lithography machines that are made by ASML

But ASML is really just an integrator because almost all the critical parts are produced by some other company in another country, for example their light source is US based Cymer. Because Cymer is a US company the light source is US origin, this is what the US leveraged in preventing ASML from exporting the EUV machines to China, and in turn, from demanding that TSMC (which uses ASML machines that have US parts) to cut ties with Huawei etc

https://www.bloomberg.com/news/articles ... won-t-work

Doly wrote:

And then of course we sold them down the river with globalization rather than fixing the flaws in their labor organizations (not that it was everyone else's requirement to do that for them).

Labor organizations may have had lots of flaws, but that wasn't the main thing that made globalization happen. What made it happen, mostly, was three things. First, cheap transport. Second, free trade. Third, differences in labor costs. When the Chinese can make the same thing at half the price because their labor costs them a lot less, it really doesn't matter how good or bad labor in your country is.

The second and third were policy decisions. The USA could have chosen to put barriers on trade to protect domestic manufacturing, but the choice was made that it didn't matter. The USA could also have encouraged the rise of standards of living in other countries with foreign policy decisions, but in general everyone thought it would be just great to have poor people in other countries building stuff and just buy the stuff from them. The chickens have come home to roost, and it was a pretty predictable outcome, in fact.

That's a good cue to discuss the Export Land Model. That is the concept that the more an oil producing country develops, the more of its exporting resource it will use itself, to the point where it doesn't export enough anymore to be what it once was.
The fear of that is what actually lies underneath the animosity against brown skinned people in places like the UK. Yes, it helped lead to Brexit. And is on the radar in France, for domestic terrorism. But the policy makers would rather run the risk of population destabilization, than let those people use their own oil!

Polybius wrote:So TSMC the Tiawanese chip fab that creates everything from nvidia gpu chips to the chip in your iphone etc is nothing without the specialized very expensive export controlled EUV lithography machines that are made by ASML

But ASML is really just an integrator because almost all the critical parts are produced by some other company in another country, for example their light source is US based Cymer. Because Cymer is a US company the light source is US origin, this is what the US leveraged in preventing ASML from exporting the EUV machines to China, and in turn, from demanding that TSMC (which uses ASML machines that have US parts) to cut ties with Huawei etc

https://www.bloomberg.com/news/articles ... won-t-work

That is my understanding. Thanks for the link!

JuanP wrote: Chinese trade with BRI nations grew dramatically last year, but some countries, particularly the USA and Australia, are being punished by the Chinese for their aggressive foreign policies towards China.

Most Australian's would be quite happy if there was a total trade embargo with the chinees, They take our gas, out prime meats and dairy, untold minerals, and in return they send crap that's broken before it comes out of the box. We don't need them, the world doesn't need them.

theluckycountry wrote:

JuanP wrote: Chinese trade with BRI nations grew dramatically last year, but some countries, particularly the USA and Australia, are being punished by the Chinese for their aggressive foreign policies towards China.

Most Australian's would be quite happy if there was a total trade embargo with the chinees, They take our gas, out prime meats and dairy, untold minerals, and in return they send crap that's broken before it comes out of the box. We don't need them, the world doesn't need them.

That's funny.

China is thinking the exact same about America...

5% of the world population, consuming 25% of the resources... propped up by the exorbitant privilege of the petrodollar hegemony with the USD global reserve currency status maintained by threat of military force and the holding of OPEC hostage.

China no longer wants to be the cheap labor factory of the West, down on the value chain and hardly making a buck (for example in a $1000 iPhone, only about $12 goes to China as net profit) and destroying its own environment just so that those in the West can continue to overconsume and keep buying things without having to worry about hyperinflation as their respective governments printed to BRRRRRRRR like no tomorrow...

BRI isn't just about trade, but also part of China's Dual Circulation strategy of getting rid of the fat useless eater middle man (USA) and cutting America out of the equation and only trading with the resource rich nations for raw commodities that it actually needs and focusing internally on its own domestic market to make the goods and products for their own citizen's enjoyment and consumption rather than to sell it for Uncle Sam in exchange for hostile worthless USD paper....

China no longer needs the West, in fact its in China's best interest to decouple as quickly as possible or the West/US will take China down with it as American drowns and goes down under

Polybius wrote:China no longer needs the West, in fact its in China's best interest to decouple as quickly as possible or the West/US will take China down with it as American drowns and goes down under

Yes...China needs to build even more empty apartment buildings and vacant cities to sell to even more Chinese real estate speculators until even more giant Chinese corporations go bankrupt.

Hahahahahahahaah!


How many more empty buildings and vacant apartments does China really need?

Cheers!

Plantagenet wrote:

Polybius wrote:China no longer needs the West, in fact its in China's best interest to decouple as quickly as possible or the West/US will take China down with it as American drowns and goes down under

Yes...China needs to build even more empty apartment buildings and vacant cities to sell to even more Chinese real estate speculators until even more giant Chinese corporations go bankrupt.

Hahahahahahahaah!


How many more empty buildings and vacant apartments does China really need?

Cheers!

https://www.rt.com/op-ed/547457-housing ... te-equity/

Forced to give up their dreams of a “real house,” first time home-buyers set their sights lower, and ex-homeowners muscled out of the market by Covid-19-related job losses have to do the same. The need is great enough that these once-derided mobile homes are now achieving mainstream respectability, according to USA Today – but profit-hungry private equity firms have been buying up stakes in the companies that own these trailer parks for years, going long on the collapse of the American dream.

Trailer trash no more
‘Manufactured homes’ house some 22 million Americans, according to the Manufactured Housing Institute. With prices running about half that of “normal” homes, and the average American family’s net worth either stagnating or declining as inflation soars and the stock market increasingly decouples from reality, the stigma long associated with living in these structures has, supposedly, begun to dissolve. Beggars, after all, can’t be choosers.

https://youtu.be/fURFhngqdkM?t=159

Bank of America: The US is on the Brink of a Recession
GDP growth is based on inventory surge.

theluckycountry wrote:

JuanP wrote: Chinese trade with BRI nations grew dramatically last year, but some countries, particularly the USA and Australia, are being punished by the Chinese for their aggressive foreign policies towards China.

Most Australian's would be quite happy if there was a total trade embargo with the chinees, They take our gas, out prime meats and dairy, untold minerals, and in return they send crap that's broken before it comes out of the box. We don't need them, the world doesn't need them.

Come on! That's not how it works and you know that. The Chinese have been purchasing Australian goods for several decades and paying in US$. My guess Is the Australians are free to sell what they own to anyone they want, just like the Uruguayans. Much of the wealth Australians have earned, saved, invested, and/or spent in the last 40+ years came from China. How is it the fault of the Chinese that most Australians freely choose to buy Chinese crap with that wealth?

And do yo think Uruguayans, Australians, Americans, or any other group of humans, are needed more than the Chinese are?

By the way, how many here support a global economic decoupling into two, mostly separate, financial, oconomic, and trade blocks? It appears that many support a new kind of cold war.

Despite an apocalyptic media narrative, the modern era has brought much longer lives and the greatest decline in poverty ever.

No, the World Is Not Heading Toward Mass Extinction

JuanP wrote:
Come on! That's not how it works and you know that. The Chinese have been purchasing Australian goods for several decades and paying in US$. My guess Is the Australians are free to sell what they own to anyone they want

Of course. We sell in the free market and the corporations controlling the flows of minerals and food don't care who they go to. But in a better world, where China has been obliterated by nuclear weapons when they marched into North Korea to drive out the US Forces, we wouldn't be in this situation would we? The Roman Empire wouldn't have hesitated. Neither would the Third Reich or the Japanese Empire.

I think China is going to have a revolution, before they achieve anything like semiconductor independence. Xi is increasingly isolated from those who inform him. He is a one man show. The population is aging. There aren't enough young people. The disconnect will show itself in some irreversible way at some point. It will probably come about the same time as the Russian shut-in well crisis begins to set in.

evilgenius wrote:I think China is going to have a revolution...

I think you could be right, only two things to my mind would forestall that. Either a massive government bailout, like the US did after the depression of the 1930's put the nation on edge, or a massive War. Take the people's discontent and focus it on an external enemy, a well used political option. I mean lets be rational, WWIII will happen one day, it's just the nature of life on planet earth.

I disagree. Collapse will happen. We just don't know its exact date, however.

Probably won't even realize it as it happens. Boiling frog analogy, not my favorite, but it fits the situation as its unraveling before us.