Nuclear

Fukushima update

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Japan’s Ministry of Environment plans an interim storage site of approximately 16sqkm to temporarily house contaminated soil and other waste. Some 22 million cubic metres of soil is likely to be collected. Scattered throughout Fukushima prefecture are some 5.5mn black bags containing soil contaminated by the crippled reactors. The government intends to find a final disposal site outside Fukushima Prefecture to permanently store the contaminated soil by 2045.

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One million tonnes of contaminated radioactive water is being stored in 850 5-storey tanks. The amount of contaminated water is growing by 150 tonnes a day. Capacity is 1.1mn tonnes. The Nuclear Regulation Authority (NRA) is encouraging Tepco to dump water that has diluted to levels below that of national standards into the sea claiming it will have little or no impact on local fisheries. The NRA has said that these tanks can’t be used indefinitely, planning to store it until January 2021.

Tepco aims to remove to remove melted fuel debris inside the damaged reactors around 2021 and remove spent  and unused fuel rods from the storage pools inside reactor 3 in the middle of this year. The other two reactors will see their rods removed around 2023.

Unsurprisingly information is scant leading to public mistrust of foodstuffs emanating from the region. Taxpayers have funded around $120bn so far in the clean up. To think much of this damage could have been avoided had then PM Kan listened to his nuclear experts to release the pressure from the reactors 10 hours before they exploded.

 

How would you like to save the planet?

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Climate alarmists are an interesting mob. E&E Research cites that moving North Koreans toward basic necessities you and I take for granted (e.g. electricity) might necessitate coal fired power stations being erected. That would lead to a growth in emissions as the country is rich in coal reserves. This must be stopped immediately.

E&E’s Daniel Kish said, “North Koreans reduce carbon dioxide emissions by eating, rather than burning, twigs. That’s what central control always ends up doing,

So it would seem that keeping North Koreans in the dark and encouraging its dicactor to keep developing nukes and oppressing the population is preferable in order to stop global warming. Why not keep all developing nations from jumping on the grid? Why not sacrifice their people for the greater good of the world. How can E&E continue its work if sacrifices aren’t made elsewhere?!.

Saving the planet is a grand idea…but how? Is it any wonder climate skeptics keep questioning the science….?

World on the brink of WW3? Press on the blink more like it

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When you read a title like “world on the brink” it is easy to be misled to thinking this is a Trump/Putin related incident. The fact is the Iranian backed Houthi in Yemen have been lobbing ballistic missiles at Riyadh and staging border skirmishes for years. The Americans have been advising Saudi Arabia where to strike the Houthi in Yemen. This is a decades old fight and since the death (assassination) of former President Saleh last year the Houthi have become even more emboldened than they were during the Arab Spring 8 years ago.

Yet it is so easy to draw conclusions. Did the mainstream media report the sinking of a Saudi naval frigate in the Bab-al-Mandeb strait in Jan 2017 which took the lives of 176 sailors? Has the Israeli shekel collapsed since Trump and Putin exchanged verbal salvos? No. The Tel Aviv indices? No. Surely a relatively liquid financial barometer in a country that has been warned not to intervene by Putin too. Would quickly price in any fears.

The situation over Syria may be tense but if you look at what Putin is really trying to do he is weighing the size of Trump’s guts to call his bluff. We shouldn’t forget when Russia first intervened in Syria several years ago, Putin told Obama that US forces had two hours to get out of harm’s way. That is the warning one would give the Luxembourg armed forces, not the most powerful military in the world. Obama heeded Putin. Putin had carte blanche. That’s why nothing happened with the Ukraine. Sanctions were put in place but no one made any attempt to ‘change behviours.’

It is worth nothing that Syria is Rosoboronexport’s (Russia’s military export wing) 2nd largest customer after Iran. Putin is sick of having the West try to remove his clients. Assad is key to Russia’s foothold in the Middle East. With an essentially pro-Iran Iraqi government and Syria as well as Hezbollah Putin has a geopolitical doormat from the troubled separatist states to Russia’s south to Lebanon.

The problem Putin faces is if Trump yanks his chain, does he shoot US missiles down as threatened? He said they’ll attack launch sites which effectively equals sinking US naval vessels as that is how they are launched. This is perhaps the easiest way to escalate a skirmish out of Putin’s control. If Putin doesn’t do anything, Trump holds one over him. So Putin is hoping by the use of very strong language that Trump backs down. It is not exactly the best way to handle on either side but this is the first time in almost a decade where the US has a leader that won’t be pushed around. Unpredictablity is a strength not a weakness

Looking at history. The NVA was supplied by the Russians during the Vietnam War and the Afghans were supplied by the Americans in the war with Russia. Nothing new. The Russians returned the favour when the “Coalition” deposed Saddam and entered Afghanistan. Proxy wars have been fought for over 50 years.

The US is dispatching a carrier battle group to the Mediterranean. Theresa May is sending a UK submarine. The Russians are conducting military exercises with 11 warships in the same area. Of course scare stories are amock and clickbait media will report how we’re two seconds from a thermonuclear exchange.

It begs the question had Obama suggested to Putin he was bombing Syria, he would be praised for level headed genius. If Trump managed to bomb Syria with no Russian response then would we see the media have a mea culpa moment? Not a chance. It would be palmed off as a lucky break. If we go back in history, we can see good nations that did nothing let tyrants get away with murder. Have a look at Russia and China in the last decade. Man made military bases in territorial waters of other nations, early warning systems on the contested  Spratly’s and agreements in Vanuatu and Sri Lanka which provides naval ports for China. Putin is getting the old ‘union’ back together and there are plenty of willing despots happy to ride his coattails.

Putin is livid at the outcome of the nerve agent scandal seeing the expulsion of so many diplomats. He is not one that likes criticism as many an oligarch has found out the hard way. The question for those that fear what Trump might do should worry more about what will happen if he doesn’t. The downside is that the media likes Putin more than Trump. For a president with a glass jaw, his moves will be far more heavily scrutinized than Putin’s. He’s damned whichever way he turns. Putin on the other hand  willl be excused for being a dictator, whatever he chooses to do. The media will hope it dies down as they turn a blind eye and pillory their own governments for not taking in enough refugees.

Appeasement is an ever widening feature of governments in the West today. There are Neville Chamberlains everywhere. Who will stand up to Putin if Trump doesn’t? Whether Syria is the right battleground is beside the point. Because if it isn’t Syria it will end up being somewhere else.  The problem is only Trump “can” credibly shirt-front the former KGB officer.

 

2018 – no more space for multiple ‘elephants’ in the room

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The Contrarian Marketplace wishes everyone a Happy New Year and prosperous 2018.

As oft the case people are busy making new year’s resolutions. CM mission doesn’t change. It aims to further energize the spirit of enquiry. To be the maverick voice that will not be silenced. We live in a world where we need to become comfortable being uncomfortable. We can no longer hide behind group think Because we feel it is dangerous to challenge consensus views. CM won’t buckle to identity politics, victimhood or social justice.

However that will never exclude us from criticism and we welcome feedback to improve the offering. We will not take The Guardian approach of refusing to acknowledge the content might be the problem when appealing for readers to ‘donate’. CM is self funded. It will remain so because it never wishes to be beholden to others to peddle tailored messages to keep the lights on.  If CM doesn’t survive on its own merits then it dies through market forces.

In 2017, Brandon Tatum showed what impact a Tucson, Arizona police officer can have on today’s media. His videos have gone viral (50mn+ views) on topics from the NFL, BLM to anti-Trump protests. He is now working for the Conservative Tribune such has been his impact. He speaks in cold hard truths. One doesn’t have to agree with what he says but he makes compelling arguments. No accolades from the journalist associations to self congratulate. As we used to say at high school sports competitions- “look at the scoreboard.”

CM started two years ago to challenge conventional thinking on all manner of topics.  It was born out of a growing realization that the mainstream media on both sides of the fence was too biased. Investigative journalism has all but disappeared, replaced with clickbait headlines and little more than biased piffle for what can only loosely be described as content. It seems that journalists are paid on the number of shares or likes rather than the quality of input.  As Ariana Huffington once said, “I’ve long said that those of us in the media have provided too many autopsies of what went wrong and not enough biopsies.”

2017 has been a continuation of the ridiculous pandering to political correctness and our lawmakers seem even more determined to avoid censure from social media, somehow thinking it speaks for the majority. Gender neutral toilets, removing statues and same-sex marriage take priority to the oncoming fiscal/monetary train wreck and a fracturing geopolitical landscape. It is almost as if our elected leaders have the blinkers on.

2018 is shaping up to be one that our political class is ill prepared for. Out of one’s depth is not a harsh enough criticism. Too many governments (including conservatives) are running up the national credit card trying to bribe bewildered constituents into tolerating more of their nonsense. However at some point, appeasement will not work because government’s can’t economically afford it.

Silent voices are increasingly pushing back. Traditional parties are seeing their constituents abandoning them. Australia’s conservative Liberal Party is Exhibit A. It is no longer a party true to its core. After the Turnbull coup it has taken its constituents for mugs but they have left in droves. While the Libs champion superior leadership, how is it One Nation has taken a huge bite out of it’s support base? It doesn’t add up and its this sense of denial that guarantees they’ll be destroyed at the next election.

Look at the growth in nationalist parties in Austria, France, The Netherlands, Germany, Italy and even America. While they may not have outright majorities in every case the reality is that all of these parties surged in the most recent elections. Mainstream parties can mark it down as a one-off or ‘they’ll be back’ mentality but this time is different. Take Trump. His GOP hate him almost as much as the Democrats. While the mainstream media ties itself into knots over the relevance of well done steak and tomato ketchup to running a country or the fact he paid millions in tax, his brand of political incorrectness is refreshing.

Sure his words are vulgar at times and Obama knocks the sports off him for eloquence or as a nice guy but we are in a world of ruthless people. The geopolitical landscape is rapidly changing. The last US administration allowed a free-for-all for nations such as China and Russia to roam free on the global landscape. Russia’s actions in the Ukraine, Syria and Iran or China building man made military bases in contested Asia-Pac waters have filled a vacuum vacated by the US. We should be glad that we have a Trump who is putting his foot down that things have changed.

While Trump’s use of ‘Rocketman’ to describe North Korea’s leader may seem juvenile, China hasn’t fully worked him out. They stroked his ego by allowing him to be the first President to dine in the Forbidden City after his rhetoric saying that if they don’t deal with Kim he will. The resumption of Chinese oil trading with North Korea in full defiance of UN sanctions tells two things. China thinks the UN is a waste of space and it is testing Trump’s resolve to carry out his threats to take care of business with minor provocations. China’s military is nowhere a match for the US so this could backfire badly if they miscalculate. This will escalate again in 2018.

Don’t rule out India’s growing frustrations with China. China’s built a naval port in Sri Lanka’s Hambantota. Recently the Maldives signed a FTA with China which should be ringing alarm bells in Delhi. For the last decade, China has been strengthening its armed (ground and air) forces to India’s north too, including the funding of the upgrade of the 1300km construction of the Karakoram Highway (aka China-Pakistan Friendship Highway). It is no surprise that Russia has been replaced by the US and UK as preferred arms suppliers to India.

As written several days ago, the Middle East seems to be an unstable powder keg. The way the stars are aligning with respects to the death of the former Yemeni President Saleh, the cleaning of the House of Saud, the repudiation of Qatar by the Gulf states and ructions in Iran point to something larger to kick off. Do not be surprised to see Israel and Hezbollah clash again in 2018. It won’t be an Arab Spring. Afterall this is more a shift toward a more direct clash between Sunni and Shia, not just played through proxy wars in Yemen, Syria or Lebanon. One can’t sink Saudi and Emirati naval vessels off Yemen’s coast with Iranian Revolutionary Guard support indefinitely.

These geopolitical problems will only put pressure on global markets which are already overstretched asset bubbles in almost every form – equities, bonds and housing. The realisation that unfunded pensions are likely to wipe out the retirements plans of millions causing even more pressure on economic growth. There is no escaping the fact that the can has been kicked down the road for too long. Whether 2018 is the precise year it unfolds is still a moot point but we are moving ever closer to the impending financial collapse which will be uglier than 1929.

Central banks have no plausible ammunition left to play with. Bloated balance sheets filled with mislabeled toxic assets (liabilities). Record low interest rates offer next to no policy flexibility and tapped out consumers face oblivion if asset prices keel over. A systemic banking collapse is absolutely plausible. No amount of QE will work this time.

Yes, it would be nice to see 2018 trump 2017 for good news (it wouldn’t be hard) but sadly the punch bowl at the party is empty and the hangover won’t be pleasant. No amount of painkillers will let one avoid a throbbing headache which will last a very long time.

Forewarned is forearmed.

Yemen – Saleh’s death is the dangerous slice in the Iran & Saudi sandwich

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Even before the Arab Spring, CM (in a previous life) wrote that Yemen was a trouble spot. It’s former President Ali Abdullah Saleh (Sunni) has died of natural causes – he was assassinated in a spate of tribal violence in the capital Sana’a yesterday. No stranger to being an oppressive tyrant during his rule, after being ousted in the Arab Spring he was in recent years working with the Houthi tribe (Shi’ite) to regain power before switching back to a US backed Saudi-friendly deal maker. He proved that power is more important than religious sect. However the Houthi weren’t prepared to suffer a turncoat who betrayed them so Saleh was duly dealt with.

Why is Saleh’s death important? What it now does is give Saudi Arabia more will to take more decisive action against the Iran backed Houthi. It is no surprise that Saudi Arabia has cleaned house with the arrests of  royal family members to tighten the inner circle. It smells like the early stages of broader tit-for-tat skirmishes before all out conflict ensues. Yemen is often argued as a proxy war between the two.

While many are distracted by the US Embassy to Jerusalem as an unnecessary ‘in-the-face” action, it is a very firm line in the sand to where the US cards already lie. No big surprises. For now most Gulf States want Israel on their side to help them defend against and ultimately defeat Iran.

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At the narrow Bab al-Mandeb Strait separating Yemen and Djibouti/Eritrea, cargo ships make their way up the Red Sea to the Suez Canal, could become a major choke point. This year multiple US, Saudi and Emirati warships have been attacked by Houthi rebel forces. In January 2017 a  Saudi al-Madinah frigate was sunk in the strait. An Emirati HSV-2 swift naval craft was also put out of action in late 2015.

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Safe access to the strait is crucial at present because of Egypt’s reliance on imported LNG to maintain stable electricity supply. One LNG tanker heads to Egypt each weeknight through the canal. Just under 10% of global trade goes through it as well. Any blockage or restricted access would force ships to sail the long way around the Horn of Africa adding another 40% to the journey. This would have significant impacts on shipping and trade. Markets aren’t factoring anything at this stage.

The problem with naval conflict is that Yemen is backed by Iran which in turn is one of Russia’s best clients. Iran possesses the SS-N-22 Sunburn missile which is a supersonic anti-ship missile which even the US has no answer for. In recent years this has been upgraded to the Super Sunburn (P-270) which is even more lethal. It is a ramjet which travels at Mach-3 meaning if fired inside a 100km range then the target is likely to be toast (video here). It can be launched from a ship, submarine or land.

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Iran could blame a whole host of tribes (Sunni or Shia) sick of being under the jackboot of effective Saudi control/influence for an attack.

On December 2, Israeli jets bombed an Iranian military weapons base in Syria. Israel has warned Iran it won’t tolerate any military presence on Syrian soil. We shouldn’t forget that China has also deployed its special forces to Syria to help Assad. Clearly the Chinese see a good opportunity to clean up some of the spoils in the region. China is always happy to help out nations that are under sanction. It adds more mess into the geopolitical sphere.

While the GCC has stepped up its air attacks on Yemen post the death of Saleh, he was the only one that has been able to unite the country. Indeed it is possible that the secession of the south becomes an issue. At the time of reunification of North and South Yemen in 1990 many in the south felt their northern neighbors were pillaging too much of their oil reserve wealth. Even their private land was appropriated and spread among the Sana’a elite. Now that Saleh has gone, and Yemen fragmented again, we may see old scores settled. The Southern Movement (loyal to exiled President Hadi) in Yemen wants to take back what was stolen from them. So Saleh’s death may open a vacuum of more instability.

Iran would relish the opportunity of a fractured Yemen to further build its influence. Bab al-Mandeb may become a flashpoint to fight the proxy war. It is extremely messy, creates proper disruption and pushes Saudi Arabia and Iran closer to conflict.

Which ever way you cut it, diplomacy in the Middle East (what little there is) looks set to worsen. In a sense we are dealing with two large clients of Russia (Iran) and America (SA). Now China is siding with Russian interests by using it as a test run of its military muscle. China isn’t committing anything major but it wants to be at the negotiating table when it all goes pear shaped.

It smells very similar to the lead up to the Arab Spring. More turmoil and complacent markets which are not quite absorbing the realities of “local problems” spreading to another neighborhood. Sure we’ve seen many leaders overthrown in Libya, Tunisia, Egypt and so on in the last uprising but the pressure on Saudi is mounting hence the recent crackdown internally.

The other dark horse is Erdogan in Turkey. He is facing a corruption probe over money laundering to help Iran evade sanctions and he seems keen to externalise his problems so he can shut down the local threat. He is threatening to cut off ties with Israel if the US relocates the embassy but for a man with clear ambitions to revive the Ottoman Empire that fell less than 100 years ago that is a mere formality in the future.

The flashpoint remains Yemen. It has the perfect storm of a pawn in a global game of chess. While it whiffs of local tribes seeking revenge there are too many willing to help them achieve their aims which only plays to the broader ructions throughout the rest of the Middle East. Last week Houthi rebels launched a missile attack against the UAE nuclear power plant under construction. Power corrupts. Absolute power corrupts absolutely

When Reagan used to stick it to the Soviets

For all the flak that DJT copped today on social media for sticking it to the Rocketman, Venezuela and the United Nations, Reagan was no less tough in the rhetoric toward foes. Reagan’s speech in Berlin where he demanded Gorbachev “tear down that wall” was no less in your face than Trump telling Rocketman to smarten his act or face the music. The central instrument for burying the Soviet Union was Reagan’s massive defense build-up. He forked out $134 billion in 1980 and ramped it to $253 billion in 1989. American defense spending rose to 7% of GDP (c.4.5% now), dramatically increasing the federal deficit. The Soviet Union was compelled to keep up by raising the share of its defense spending from 22% to 27% of GDP, freezing the production of non-defence goods at 1980 levels. Economically it couldn’t keep up and by 1991 the Soviet Union folded. A small price to pay to end the Cold War. America did not wilt under Reagan as it has in recent years,

We should not forget the numerous occasions that former President Reagan openly used to ridicule the Soviets for being so backward. As the old saying goes, ‘never a truer word than that said in jest’. The joke about the curfew is a cracker.

Kim sends more firecrackers across Japan that could hit Guam

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This cannot continue. Another missile fired across Japan’s shores. This missile flying 3,700km. Guam is technically in range by that measure. As I said on The Bolt Report, Kim’s technology will get to a point where he can become a serious threat. Taking out the threat before it gets even more capable is the only credible option. Even more biting UN sanctions haven’t stopped his quest to launch more missiles in utter defiance. My key thought is that China will be coerced into forcing regime change. It cannot afford to lose the strategic buffer North Korea provides but it can even less afford US military action on its back door. Unilateral action by China will not be frowned on by the majority of the rest of the world if Kim Jong Un is neutered.

Some discussions have also questioned whether he lobs missiles over Tokyo airspace. The danger here is a failure through dense commercial air traffic lanes. In any event the world community can’t sit by and let this oppressive regime continue a weapons program to use for extortion. Trump was on a morning breakfast program yesterday discussing North Korea where he effectively said for “China to start taking action”.

As I wrote last week, Japan’s entire Aegis destroyer fleet from Maizuru is at sea. They carry the SM-3 anti-ballistic missile system. Japan cannot take North Korea’s actions as anything other than the gravest threat to national security.

This crisis has to have an ending. It can only be Kim Jong Un’s. Watch China’s movements closely from here. They’re reaching breaking point on strategy.