China’s Economy and the US Consumer

Recorded on August 16, 2023

Episode 91 of the PetroNerds podcast is a must-listen podcast covering everything from oil prices to the property crisis in China and the health of the US consumer. Trisha Curtis walks listeners through what is happening in the global economy and why it matters for oil prices and takes a deep dive into China. She covers Chinese crude demand, China’s real estate sector, and China’s rising unemployment problem. She gets into commodity price weakness, US consumer spending, US housing, US mortgage rates, US inflation, and the US problems with working from home. She talks about Chinese crude demand and stockpiling, Chinese Iranian and Russian imports, and soft crude oil prices despite the geopolitical risk premium on oil and lower inventories in the US. She covers contagion and economic risks and
problems in China including China’s massive youth unemployment rate, poor Chinese economic data, and increasingly restricted data out of China.

Trisha discusses China’s property sector and real estate slowdown and housing data and systemic implications, urban vs. rural unemployment and unemployment data in China, shadow bank connections and Ponzi schemes and their connection to property development in China. She connects the collapse in the Chinese economy and property sector to energy prices and demand and talks about espionage laws and the connections to China’s energy sector and China’s energy consumption. She talks about the one year anniversary Inflation Reduction Act and a German solar company that has moved to Colorado because of it. Trisha makes the point that the US is paying a lot of money to subsidize and throw good money after bad energy (low BTU energy). She hits on US energy use and energy security, Colorado coal-fired power generation, and California extending the life of natural gas-fired power generation.

She gets into energy security and the damage of high energy prices to the US economy. She also discusses the negative impacts on the US and the global economy from higher labor prices, higher energy prices, and higher goods prices. She talks about access to labor and fiscal lags in the US, unemployment benefits and entitlement programs in the US, and inflation. She talks about how businesses are pushing back on work from home because of productivity issues and how work from home is impacting commercial real estate and local economies and regional banks and local businesses, She explains Chinese deflation and debt problems and what Chinese deflation really means. Trisha closes this podcast by talking about Target store earnings and theft, US household debt and rise in credit card spending, the health of the middle-income consumer, and Fed minutes.

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