Climacus

latest talk with Lyn Alden: https://www.youtube.com/watch?v=O6PjUFsUM94&t=1748s at the core, her thesis of persistent inflation comes down to 2 points (without Ukraine, Corona and Chinese lockdowns which worsen the effects): - underinvestment in commodities over years (due to a) low prices, b)ESG). Capex came down from 3,5% of GDP in 2014 to under 1% in 2021. She refers mainly to oil & gas but mentions also Copper and Nickel. - supply chain issues: globalization levels out (cheap labor in EM was deflationary in the past 25 years), part of the supply side is about to be brought back home again Im just somehow puzzled how clear it seems to her that Energy stays elevated the foreseeable future, probably the next years. I remember last year beginning of 2021 when oil was about 40-50 people discussing heavily if oil was worth an investment, highlighting the danger and volatility of commodities. Now it almost seems to be a consensus that oil will stay (after even Buffett or D. Loeb bought into oil/gas in Q1). I don't really have a feeling how long it takes to replenish the supply side and how stable the output would be. Im just extremely puzzled it should take years for that! For a commodity everybody knows everybody needs, regardless of ESG. My naive thinking tells me it should be a matter of month and not years. I get the feeling most people in this forum also think its a longer lasting project? Maybe its already discussed in the Energy thread but I couldn't read through all of it.

thats an interesting perspective "Russia is catalyzing the Transformation Age" https://integrallife.com/russia-is-catalyzing-the-transformation-age/?utm_source=Integral+Life+Newsletter&utm_campaign=af6b5246f8-EMAIL_CAMPAIGN_2022_03_01_08_15_COPY_01&utm_medium=email&utm_term=0_de2cfb3770-af6b5246f8-50498209&mc_cid=af6b5246f8&mc_eid=0e1bbe52e6 Robb Smith believes the most likely outcome is a Russian failed state (less likely: a) atomic destruction, b) coup). The thing Putin most underestimated in his view was the massive unitary reaction of the West against Putin. While the West is very fragmented and decadent, he reacts very sensitive towards oppression. Thats the strength of the "green" civilizing stage (in the Integral model he represents), which started to expand from the 60s on. Interestingly he believes China must have approved the Russian invasion but will cut losses and step back from it in the coming months facing that hughe resistance. As one result Taiwan seems to be off the table. "I expect they will begin to distance themselves from Russia in subtle ways over the coming months (and not without them putting up a hell of a narrative fight while doing so). If nothing else, Taiwan has to look like it’s off the table now. There is only so far an isolated China could go into direct, great power economic competition. If Russia is the world’s gas station, China is the world’s factory, and factories need customers. It’s not in China’s interests to get into a direct economic fight with a majority of its customers."

Stupid question: could the Chinese even run the fabs? Im not aware they let <7nm chips produce in Taiwan so I assume they aren't able to design them (since its all US software). If so the only benefit of an invasion would be the destruction of the US-production but not the building of its own chips...(I further assume the production is somehow encoded).

I was trying to find a diplomatic compromise how the Chinese could incorporate Taiwan without stepping on US interest. Since it sounds just as convincing that the Chinese will get Taiwan someday as the Americans would not let them. A pure attack would be a different matter of course.

I would say the US response depends the expected consequences: will AMD and Nvidia still be able to get the amount of chips they want without loosing too much margin? Or do they get deprioritised or have to "partner" with some chinese entity? Maybe the deal is constructed in a way that the Chinese grant TSMC a kind of independency, at least in the beginning. With a (wide) transition period. This could appease the US and get the Chinese a foot in the door. I can purely speculate on this. But since the neuralgic infrastructure of the next decade is at play and with it world domination, I guess the US would put up more effort to oppose those Chinese efforts than the NATO puts up against Russia right now.

I don't really understand why Taiwan is put into context to Ukraine. I can't imagine the US would allow the Chinese to take Taiwan. You can allow yourself to ignore Ukraine (despite important commodities) but not the heart of chips. The whole future is in Taiwan. That seems to be beyond being unable to imagine Trump as president before he got it.