Edward Conard

Top Ten New York Times Bestselling Author

  • “Unintended Consequences offers deep and well-argued analyses on almost every issue.” - The New York Times
  • “…reminds us that inequality sends a signal of what society lacks most, in America’s case, entrepreneurship and risk taking.” - Lawrence Lindsey, CEO, The Lindsey Group, former Director of the National Economic Council
  • “…a fresh argument for the productive value of inequality.” - David Autor, Professor of Economics, Massachusetts Institute of Technology
  • “…challenges misconceptions that distort our economic debates.” - Arthur Brooks, President of the American Enterprise Institute
  • “…a fresh argument for the productive value of inequality.” - David Autor, Professor of Economics, Massachusetts Institute of Technology
  • “…serious thinking for serious thinkers. …a thought-provoking blueprint for growing middle- and working-class incomes.” - Mitt Romney, former Governor of Massachusetts
  • “…challenges misconceptions that distort our economic debates.” - Arthur Brooks, President of the American Enterprise Institute
  • “…a very valuable contribution.” - Larry Summers, former Secretary of the Treasury and director of the National Economic Council, president emeritus, Harvard University
  • “…a must-read for serious students of economic policy.” - Glenn Hubbard, Dean, Columbia Business School, and former Chairman of the Council of Economic Advisers
  • “…reminds us that inequality sends a signal of what society lacks most, in America’s case, entrepreneurship and risk taking.” - Lawrence Lindsey, CEO, The Lindsey Group, former Director of the National Economic Council
  • “…a comprehensive explanation of the modern economy.” - Julian Robertson, Founder, Tiger Management
  • “…a comprehensive explanation of the modern economy.” - Julian Robertson, Founder, Tiger Management
Upside of Inequality Oxford Unintended Consequences

Macro Roundup


Friday, May 31, 2024

AI Summary. Gold accounts for about 10% of aggregate official foreign exchange reserves, roughly its level in the early 2000s. International Monetary Fund country data indicate most added official gold holdings came from a few central banks, with over half of reported accumulation from China and Russia and about a quarter from several emerging markets.

Patrick Douglass, Linda Goldberg, and Oliver Hannaoui Federal Reserve Bank of New York
Date Posted:

Research from @NewYorkFed finds the rise in Central Bank gold holdings since 2009 was driven by a few countries, with China and Russia accounting for over half of reported gold accumulation, not a widespread effort to diversify away from dollars.

Are central banks broadly shifting reserves into gold?

Core argument: Gold accounts for about 10% of aggregate official foreign exchange reserves, roughly the same share as in the early 2000s.

Gold’s share of aggregate reserves remains modest at about 10%, roughly its level in the early 2000s. IMF country-level data suggest that most of the increase in official gold holdings has come from just a few central banks. More than half of reported gold accumulation since 2009 was from China and Russia, with another quarter coming from a handful of emerging market central banks (Turkey, India, Kazakhstan, Uzbekistan, and Thailand).

Takeaways by Macro Roundup® AI

  1. Gold accounts for about 10% of aggregate official foreign exchange reserves, roughly the same share as in the early 2000s.
  2. China and Russia together account for more than half of reported official gold accumulation since 2009, according to IMF country-level data.
  3. Turkey, India, Kazakhstan, Uzbekistan, and Thailand account for another quarter of reported official gold accumulation since 2009.

Related Articles:

  • Gold Rising — China appears to be shifting its reserve diversification toward gold, but its gold allocation remains well below that of other countries at odds with the United States, such as Russia and Turkey, which raised their gold holdings substantially. Gold held in domestic custody sits outside U.S. influence.
  • China Leads Record Central Bank Gold Buying in First Nine Months of Year — China has led record global central bank purchases of gold, as countries seek to hedge against inflation and reduce reliance on the dollar. The buying has helped bullion prices trade just under $2,000 a troy ounce despite rising bond yields and a strong dollar, even as gold demand excluding bilateral over-the-counter flows was 6% lower year-on-year at 1,147 tonnes.
  • The New Gold Boom: How Long Can It Last? — Central banks bought 1,079 tonnes of gold bullion in a year, the most since records began in 1950, with prices hovering near the nominal all-time high of $2,072 per troy ounce. Developing countries wary of the US dollar have been diversifying reserves after the West froze $300bn of Russian foreign exchange holdings.

AI Summary. The share of Americans moving across state lines each year has stopped declining, and by a measure tracking where 30-somethings were born, interstate mobility never fell much. In 2022, 49% of US residents in their 30s were born outside their state of residence — slightly below 2010 but above any point in the 20th century.

Justin Fox Bloomberg
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While the share of US residents who had moved in the past year fell to an all-time low of 7.8% in 2023, Americans ages 30-39 are still relatively mobile: in 2022, 49% were not born in the state where they currently live. @foxjust

Has interstate mobility in the US actually declined?

Core argument: In 2022, 49% of US residents in their 30s were born outside the state where they lived, slightly below 2010 but higher than at any point during the 20th century, per updated American Community Survey data; the figure includes people who migrated from overseas.

The share of Americans moving across state lines each year has stopped declining — and by another measure, interstate mobility never truly declined much at all. Most such moves are made by young adults, Scott Winship looked at whether US residents in their 30s were born in the state where they lived or had moved from somewhere else, numbers that I’ve updated with 2022 ACS data. In 2022, the 49% who were born somewhere other than the state where they live was slightly lower than in 2010 but still higher than at any point during the 20th century. This includes people who migrated from overseas and is thus somewhat affected by immigration trends. The percentage of native-born Americans in their 30s who were born in a different state did decline slightly from 1980 to 2010, Winship reported in 2015, but it was still higher in 2010 than at any time from 1900 to 1960.

Takeaways by Macro Roundup® AI

  1. In 2022, 49% of US residents in their 30s were born outside the state where they lived, slightly below 2010 but higher than at any point during the 20th century, per updated American Community Survey data; the figure includes people who migrated from overseas.
  2. The share of Americans moving across state lines each year has stopped declining, and by the birth-state measure interstate mobility never declined much at all.
  3. Scott Winship reported in 2015 that the share of native-born Americans in their 30s born in a different state declined slightly from 1980 to 2010 but remained higher in 2010 than at any time from 1900 to 1960.

Related Articles:

  • On The Move: West Side Story — The West's share of US population has flattened and appears to be falling, with relative housing affordability cited as a key part of the story. Metropolitan areas with median mortgage payments above the US average generally show negative or weakly positive population growth, and Pacific-state metros all have above-average mortgage payments.
  • Young Families Have Not Returned to Large Cities Post-Pandemic — The under-five population in large urban U.S. counties fell 6.1% while overall population in those counties fell 0.9%, with declines exceeding 10% in the largest counties including New York, Cook County, Illinois, and Los Angeles. Losses of young families were more severe in the Mid-Atlantic and West Coast, while the under-five population grew in Southeastern urban counties.
  • Economic Prosperity is Shifting Toward the Mountain West and Southeast — The most economically prosperous U.S. zip codes house 80.6m residents and averaged nearly 3x the job growth of "comfortable" zip codes and 10x that of "at-risk" ones. In several Southeast and Mountain West states, a much greater share of the population now lives in top-ranked prosperous zip codes than a decade earlier.

AI Summary. Bank of America loan data show year-over-year growth in total new and used vehicle loan originations slowing, with the uptrend in new car sales flattening. The bank attributes this to a more expensive all-in cost of ownership — higher interest rates, insurance, and maintenance — even as vehicle prices decline.

Joe Wadford and David Michael Tinsley Bank of America
Date Posted:

Auto sales are flattening according to internal @BankofAmerica data, as higher financing rates add nearly $100 to the average car loan monthly payment vs. 2022, and insurance costs are up 22.5% vs. last year.

Is vehicle loan growth slowing as ownership costs rise?

Core argument: Car loan interest rates have risen almost 4 percentage points since April 2022 across 48-, 60-, and 72-month terms, adding nearly $100 to monthly payments on a $51.2K loan, the average new vehicle loan amount as of March 2024 in Bank of America internal data.

While used car originations have been supported by declining used car prices, Bank of America loan origination data shows that in 2024 the year-over-year growth in total (new and used) vehicle originations is slowing; auto sales data also suggests the uptrend in new car sales has flattened off. One reason for this flattening, we believe, is that the total ‘all in’ cost of ownership – including elevated interest rates, insurance, and maintenance costs – has become more expensive even as auto prices are declining. The interest rates for car loans have risen sharply since April 2022, increasing almost 4pp for 48, 60, and 72 month loans. This translates to nearly a $100 monthly payment increase for a loan of $51.2K, the average new vehicle loan amount as of March 2024, according to internal Bank of America data. Insurance costs are rising, too. According to the Bureau of Labor Statistics’ Consumer Price Index data, motor insurance prices jumped 22.6% YoY in April 2024.

Takeaways by Macro Roundup® AI

  1. Car loan interest rates have risen almost 4 percentage points since April 2022 across 48-, 60-, and 72-month terms, adding nearly $100 to monthly payments on a $51.2K loan, the average new vehicle loan amount as of March 2024 in Bank of America internal data.
  2. Bank of America loan origination data show year-over-year growth in total new and used vehicle originations slowing in 2024, with auto sales data suggesting the uptrend in new car sales has flattened.
  3. Motor insurance prices rose 22.6% year-over-year in April 2024 according to Bureau of Labor Statistics Consumer Price Index data, and Bank of America attributes the flattening in sales partly to a rising 'all in' ownership cost spanning interest rates, insurance, and maintenance even as auto prices decline.

Related Articles:

  • The Cost of Money is Part of the Cost of Living: New Evidence on the Consumer Sentiment Anomaly — Variation in the University of Michigan consumer sentiment index that inflation and unemployment cannot explain is strongly correlated with growth in consumer borrowing costs, such as mortgage and car loan rates. The authors estimate that including interest payments and homeownership costs in the consumer price index would raise measured inflation from 3% to 9%.
  • Why Is Car Insurance So Expensive? — Motor vehicle insurance prices rose more than 22% over a year, the fastest pace since the 1970s, according to the Bureau of Labor Statistics. Insurers' personal auto businesses recorded losses of $4bn, $33bn, and roughly $17bn in successive years, and industry analysts say many companies still need higher prices to offset them.
  • April Flowers, Not Showers — Bank of America internal payments data show average household property insurance payments up 23% relative to 2019, and average per-customer payments up 25%, with a three-month average year-over-year increase of 11%. The data cannot separate auto from home insurance payments.

AI Summary. A survey of 2,800 investors at a large German bank found that giving investors information that German stock returns were low during past inflationary periods lowered their expected returns for the German stock market by 0.68–1.05 percentage points. Trading data showed this information also reduced their actual stock purchases.

Philip Schnorpfeil, Michael Weber, and Andreas Hackethal National Bureau of Economic Research
Date Posted:
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Evidence from German investors finds that educating investors about negative stock market returns during inflation causes them to reduce their return expectations and purchases of equities.

Does information about past inflation-period returns change investor expectations and trading?

Core argument: In a February 2022 survey of 2,800 investors conducted with a large German bank, those told that German stock returns during inflationary periods were low (one percent) cut their expected German stock market return by 0.68 percentage points when given return information only.

We conducted a survey with 2,800 investors in cooperation with a large German bank in February 2022 when inflation in Germany was at a 30-year high. Information on past returns during periods of high inflation [via priming by the investigators] leads to negative updating about the perceived stock-return impact of inflation and shifts return expectations in the expected direction, which feeds into [both] return expectations [Figure 6 above], and subsequent actual trading behavior. In particular, investors who learn that stock returns in Germany during inflationary periods were low (one percent) reduce their expected return of the German stock market by 0.68 percentage points for T2 (return information only) and by 1.05 percentage points for T3 (return information as well as explanations). In the trading data, treatment information about the negative stock return-inflation relation reduces actual stock purchases.

Takeaways by Macro Roundup® AI

  1. In a February 2022 survey of 2,800 investors conducted with a large German bank, those told that German stock returns during inflationary periods were low (one percent) cut their expected German stock market return by 0.68 percentage points when given return information only.
  2. Investors given both return information and explanations reduced their expected German stock market return by 1.05 percentage points, a larger shift than the 0.68 percentage points among those receiving return information alone.
  3. Trading data show that treatment information about the negative stock return–inflation relation reduced investors' actual stock purchases.

Related Articles:

  • The Big Picture: Back to the Future — The secular backdrop has shifted from disinflationary to more inflationary, with interest rates no longer near zero and real rates no longer negative. Household balance sheets are as healthy as they have been in 20 years, leaving room to borrow, while the public sector is as indebted as it has ever been.

Monday, June 3, 2024

AI Summary. Because companies weigh only their own private returns, they underinvest in research whose returns to society are far higher, and evidence contests whether intellectual property and research subsidies fix this. One model calculates that technology bubbles deliver net social gains when social returns exceed private returns by 2.5x, and estimates put corporate research's ratio near 4x.

Randall Morck Annual Review of Financial Economics
Date Posted:
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Randall Morck’s research finds that the social return to R&D investment exceeds the private return by 4X and the social benefits of tech sector bubbles likely exceed the social costs of the subsequent crashes. Hat tip to @JimPethokoukis

Do technology bubbles deliver net social gains despite costly crashes?

Core argument: Lansing (2012) models technology bubbles with costly crashes and calculates that social benefits exceed social costs when a technology's social rate of return exceeds 2.5 times its internal rate of return.

Profit-maximizing firms only consider their own IRRs, [and thus] forgo much high-SRR [Social Rate of Return] R&D. Externality theory prescribes intellectual property (IP), R&D subsidies, and other interventions to boost innovators’ IRRs; however, mounting evidence contests the efficacy of these responses. [A “Kindelberger cycle” often] begins with a hot new technology, sometimes a new market, with very high expected IRRs. A mania inflates stocks thought favored by the disequilibrium. The bubble bursts, and a panic, crash, and (sometimes) socially costly economic downturn ensue. Economic comparisons of these social gains and losses are remarkably rare. Lansing (2012) models tech bubbles with costly crashes and calculates that social benefits outweigh social costs if the technology’s SRR exceeds 2.5 times its IRR. Figure 2 suggests that the SRR of corporate R&D exceeds the IRR by a factor of 4. Historians and marketing researchers also conclude the social benefits of bubbles exceed their social costs.

Takeaways by Macro Roundup® AI

  1. Lansing (2012) models technology bubbles with costly crashes and calculates that social benefits exceed social costs when a technology's social rate of return exceeds 2.5 times its internal rate of return.
  2. Figure 2 suggests the social rate of return on corporate R&D exceeds the internal rate of return by a factor of 4.
  3. Profit-maximizing firms weigh only their own internal rates of return and forgo much R&D with high social returns, while mounting evidence contests the efficacy of intellectual property, R&D subsidies, and other externality-theory remedies.

Related Articles:

AI Summary. Market-implied forward rates are highly correlated with current interest rates, so with the US ten-year rate around 4.5% they imply it will stay near 4.5% decades ahead; academic research finds such expectations are usually poor predictions. Estimates of the future neutral interest rate instead suggest future rates will be low.

Jesper Rangvid Rangvid's Blog
Date Posted:

The 10-year Treasury currently yields 4.5% and market-implied forward rates project close to 4.5% in ‘34 and ‘44. Jesper Rangvid notes that such projections too closely track recent rates and are usually not good predictors. He forecasts lower rates.

Are market-implied forward rates reliable predictors of future interest rates?

Core argument: With the US ten-year interest rate around 4.5%, market-implied forward rate models predict the ten-year rate will also be around 4.5% in 2034 and 2044, reflecting the high correlation between current and implied expected rates.

There is a high correlation between current interest rates and expected interest rates as implied by market-implied forward rates. As the US ten-year interest rate today is around 4.5%, this means that these models predict that the US ten-year interest rate will also be around 4.5% in 2034 and 2044. Academic research has found that such expectations are usually not good predictions of future outcomes. An alternative could be to look at expectations based on sound economic modeling, such as estimates of future r*. These estimates suggest that future interest rates will be low.

Takeaways by Macro Roundup® AI

  1. With the US ten-year interest rate around 4.5%, market-implied forward rate models predict the ten-year rate will also be around 4.5% in 2034 and 2044, reflecting the high correlation between current and implied expected rates.
  2. Academic research has found that expectations implied by forward rates are usually not good predictions of future interest rate outcomes.
  3. Expectations based on economic modeling, such as estimates of future r*, suggest future interest rates will be low.

Related Articles:

  • The Future Of r* — Long-run equilibrium interest rates are argued to stay low relative to recent decades' historical average but above pre-pandemic lows, implying rates only slightly below current levels, with a nominal neutral rate near 3.5% offered as illustration. Rising government debt, particularly in the US, is identified as the main risk to that view.
  • Quo Vadis, r*? The Natural Rate Of Interest After The Pandemic — Estimates of the natural rate of interest across core advanced economies suggest it may have increased, though the estimates are widely dispersed and statistically uncertain. Low expected potential growth and rising longevity may weigh on the natural rate, while large fiscal deficits, age-related spending, and public investment needs for infrastructure, defense, and the green transition may push it up.
  • Global Natural Rates in the Long Run: Postwar Macro Trends and the Market-Implied r* in 10 Advanced Economies — Estimates for 10 advanced economies show natural interest rates have declined over the long run, though not steadily: as recently as the 1990s they ranged from 100 to 600 basis points, while by the end of the sample 4 of 10 countries had a negative natural rate and most others fell between 0 and 50 basis points.

AI Summary. The dollar value of US consumer spending has grown about 6% a year since mid-2022, but a growing share of that growth comes from "imputed" categories rather than actual transactions, and excluding those, spending appears to be slowing. Meanwhile core goods inflation has accelerated, running at 2% annually.

Matthew Klein The Overshoot
Date Posted:

Core consumer goods inflation has been accelerating over the past few months, reversing a long-term pre-pandemic trend of goods prices falling about 1% each year. @M_C_Klein

Does excluding imputed categories reveal slowing consumer spending despite rising inflation?

Core argument: U.S. nominal consumer spending has risen at about 6% a year since mid-2022, helping keep price growth somewhat above the Federal Reserve's 2% yearly goal.

The dollar value of U.S. consumer spending has been rising steadily at a yearly rate of about 6% since mid-2022. That has helped keep prices growing somewhat faster than the 2% yearly goal favored by Federal Reserve officials. But the composition of this spending has been shifting over the past year or so, with an increasingly large growth contribution coming from categories where spending is “imputed”, instead of based on actual transactions and observed prices. Strip that out, and nominal spending seems to have been slowing. Yet this does not seem to be translating into slower inflation, with core consumer goods prices accelerating notably over the past few months. Core goods inflation seems to have returned with a vengeance. Excluding energy, groceries, and motor vehicles and parts, PCE goods inflation is now running at 2% a year. In the years before the pandemic, ultra-core goods prices fell about 1% each year.

Takeaways by Macro Roundup® AI

  1. U.S. nominal consumer spending has risen at about 6% a year since mid-2022, helping keep price growth somewhat above the Federal Reserve's 2% yearly goal.
  2. An increasingly large share of U.S. consumer spending growth comes from categories where spending is imputed rather than based on actual transactions and observed prices, and excluding those categories, nominal spending appears to be slowing.
  3. PCE goods inflation excluding energy, groceries, and motor vehicles and parts is running at 2% a year, whereas such ultra-core goods prices fell about 1% each year before the pandemic.

Related Articles:

  • The Inflation Outlook Is Getting Better, But Also Worse? — Producer price measures of input costs for manufactured goods have turned positive again, in some cases rising at the fastest rate in more than a year, and this is filtering through to core final demand. US domestic manufacturing production has been flat or slightly down since 2013 despite strong growth in domestic demand for manufactured goods.
  • The Big Picture: Back to the Future — The secular backdrop has shifted from disinflationary to more inflationary, with interest rates no longer near zero and real rates no longer negative. Household balance sheets are as healthy as they have been in 20 years, leaving room to borrow, while the public sector is as indebted as it has ever been.
  • An Update About How Inflation Has Affected Households at Different Income Levels Since 2019 — The Congressional Budget Office estimates that income after transfers and taxes grew faster than consumption prices for all income groups, lowering the share of income needed to buy the same goods by 2% for the lowest-income fifth and 6.3% for the highest-income fifth.

AI Summary. U.S. Department of Homeland Security data suggest that in the year with the most border apprehensions on record, nearly 72% of border crossers were apprehended and more than 650,000 entered without inspection, for just over 2.3m total crossings — eighth-highest since 2000. Applying similar apprehension rates to later years suggests those totals, while high, were also not records.

Kevin Rinz Briefing Book
Date Posted:

Illegal immigration may not be at a record high. @kevinrinz argues that apprehension statistics reflect a change in behavior as illegals seek out government authorities to take advantage of the asylum system.

Do record border apprehensions mean record border crossings?

Core argument: DHS data suggest nearly 72% of border crossers were apprehended in 2021, including Title 42 expulsions, while more than 650,000 entered without inspection, bringing total crossings to just over 2.3 million.

Consider 2021, which at the time was the year with the most apprehensions on record. That year, DHS data suggest that nearly 72% of people crossing the border were apprehended (including Title 42 expulsions), while more than 650,000 people entered without inspection. That brings the total number of border crossings for the year to just over 2.3 million. Rather than being the most border crossings on record, this total ranked eighth to that point since 2000 (the earliest year for which estimates of entries without inspection are available). Applying the 2021 apprehension rate to data for 2022 and 2023 suggests that, while high, those years are also not record-setting even since 2000. Using the average apprehension rate for 2000 through 2010 to impute entries without inspection prior to 2000 suggests several additional years in which total border crossing may have been higher than they are now, including periods in the late 1990s and mid-1980s.

Takeaways by Macro Roundup® AI

  1. DHS data suggest nearly 72% of border crossers were apprehended in 2021, including Title 42 expulsions, while more than 650,000 entered without inspection, bringing total crossings to just over 2.3 million.
  2. The 2021 total of just over 2.3 million border crossings ranked eighth since 2000, the earliest year for which estimates of entries without inspection are available, rather than setting a record.
  3. Applying the 2021 apprehension rate to 2022 and 2023 data suggests those years were high but not record-setting, and using the 2000–2010 average rate to impute earlier entries points to higher totals in the late 1990s and mid-1980s.

Related Articles:

  • Illegal US Border Crossings Aren’t Really Breaking Records — Official US border encounter statistics exclude people who evade Border Patrol agents, who in past decades made up the majority of illegal crossers. The Department of Homeland Security estimated apprehension rates of 33%–43% in the 2000s versus 81% more recently, a shift attributed mainly to most crossers intending to turn themselves in and apply for asylum.
  • Immigration and the U.S. Economy Since the Pandemic: An Accounting Exercise — The US native-born labor force fell by about 1.2m over four years, a decline driven overwhelmingly by population aging, while foreign-born labor supply grew by about 3m, leaving the overall labor force up roughly 2m. Without immigration, the total US labor force would have shrunk.
  • The Demographic Outlook: 2024 to 2054 — The Congressional Budget Office projects the US population will grow from 342mm in 2024 to 383mm in 2054, an average 0.4% a year — less than half the 0.9% pace of the prior five decades. Immigration accounts for about 70% of growth over the next decade and for all population growth beginning in 2040.

AI Summary. Negotiations over the Power of Siberia 2 pipeline have stalled, with people familiar with the talks saying China asked to pay close to Russia's heavily subsidised domestic gas prices and would commit to buying only a small fraction of the pipeline's planned 50bn cubic metre annual capacity. China already pays Russia less for gas than other suppliers.

Max Seddon, Anastasia Stognei, Henry Foy, and Joe Leahy Financial Times
Date Posted:

Russia’s effort to conclude a major gas pipeline deal with the PRC is running into obstacles as Beijing is demanding a price close to Russia’s heavily subsidised domestic price.

Are China's price demands holding up a major Russian gas pipeline?

Core argument: China has asked to pay close to Russia's heavily subsidised domestic gas prices for Power of Siberia 2 and would commit to buying only a small fraction of the pipeline's planned 50 bcm annual capacity, according to people familiar with the matter.

Beijing’s tough stance on the Power of Siberia 2 pipeline underscores how Russia’s invasion of Ukraine has left Putin increasingly dependent on Xi Jinping for economic support. People familiar with the matter said China had asked to pay close to Russia’s heavily subsidised domestic prices and would only commit to buying a small fraction of the pipeline’s planned annual capacity of 50bn cubic metres of gas. Before the war in Ukraine, Gazprom relied on selling gas to Europe at high prices in order to subsidise Russia’s domestic market. China already pays Russia less for gas than to its other suppliers, with an average price of $4.4 per million British thermal units, compared with $10 for Myanmar and $5 for Uzbekistan, the CGEP researchers calculated from 2019-21 customs data. Gazprom’s exports to Europe fell to 22 bcm in 2023 from an average 230 bcm a year in the decade before the full-scale invasion of Ukraine.

Takeaways by Macro Roundup® AI

  1. China has asked to pay close to Russia's heavily subsidised domestic gas prices for Power of Siberia 2 and would commit to buying only a small fraction of the pipeline's planned 50 bcm annual capacity, according to people familiar with the matter.
  2. China already pays Russia an average of $4.4 per million British thermal units for gas, versus $10 for Myanmar and $5 for Uzbekistan, according to CGEP researchers' calculations from 2019–21 customs data.
  3. Gazprom's exports to Europe fell to 22 bcm in 2023 from an average of 230 bcm a year in the decade before the full-scale invasion of Ukraine, having previously relied on high-priced European sales to subsidise Russia's domestic market.

Related Articles:

  • America’s Energy Export Boom — The US produces more crude oil than any other country and, counting total petroleum products, more than Saudi Arabia and Russia combined, with crude and natural gas output at record highs and gas production up 7% from its 2019 peak. Net US energy exports reached $70bn over 12 months despite falling oil and gas prices.
  • Electravision — The fossil fuel share of global primary energy is falling about 0.40% per year, matching the pace of decarbonization during the 1973–1988 nuclear buildout, though total carbon dioxide emissions have not declined because energy consumption keeps rising. Renewable energy is used almost exclusively for the electricity grid, with little penetration in industry and transport.
  • Germany’s Days as an Industrial Superpower Are Coming to an End — Germany's industrial base faces mounting pressure as the US competes with Europe for climate investment, China shifts from customer to rival, and cheap Russian natural gas has ended. In chemicals, nearly one in 10 companies plan to permanently halt production processes, according to an industry association survey, while BASF is cutting 2,600 jobs and Lanxess is reducing staff by 7%.