Checkmate, Globalists — Humanity's path towards one big super country took not one, not two, but maybe ten steps back after the pandemic and never has this been more clear than right now.
Global value chains, as represented by the WSJ, have slumped since a 2008 peak and took a big dive in the throes of COVID. The metric is an indicator of connectedness between global economies, counting any good that has to cross at least two borders before reaching its final destination as part of the “global value chain.” Anyone who has taken Business 101 knows a value chain is nothing more than a bullsh*t MBA term for supply chain, so it's really just a measure of how often goods have to travel the globe before reaching the end consumer.
To no surprise, the share of the global goods market this pertains to dropped precipitously over the last year. Supply chain onshoring has become the choice for ensuring robust national supply chains, particularly of essential goods like drugs.
The implications of this dynamic are far more than they seem. See, countries that trade with each other are generally much less likely to drop nuclear bombs on each other, for one, but it’s an interesting representation of how much nations trust goods produced in other nations. Maybe most important, it's a stark reminder that most pieces of plastic will travel the world more than you likely ever will.
Energy — You haven’t heard this in awhile, but energy stocks and commodities finally stopped just mindlessly ripping upwards yesterday. Euro natural gas futures actually fell, and not by a little, losing 5.3% while stateside natty gas continued up a decent 1.3%. Euro gas fell as well, with Brent losing 1.4% on the day while WTI here in the U.S. barely even moved. Only one stock in the S&P 500 Energy Index, Valero Energy, actually rose, gaining 1.2% while everything else fell. Kinder Morgan led the fall, melting a sizable 6%.
Who’s to blame you ask? Well, who else but China? The CCP earlier this week came out with measures to ease part of the global energy crisis, letting basically every energy market in the world relax a little, except the U.S. Meanwhile, an industry report came out with projections (or, dreams) of increasing crude stockpiles incoming shortly. Bad news for an energy bull, but great news for anyone who likes having heat in the winter.
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