Huge thanks to Kimpton Bradford for being my June sponsor. At his request, this thread is dedicated to his lifelong hero, Dr. David Suzuki, who recently celebrated his 90th birthday.
“Global central bank warns of Liz Truss-style bonds crisis.
“In its latest annual economic report, the BIS identified a highly unstable “fiscal-financial stability nexus”. It noted that historically high levels of public debt, combined with aggressive short-term borrowing by heavily leveraged hedge funds, leave sovereign debt markets acutely vulnerable to liquidity panics and sudden “fire sales”.”
https://www.thetimes.com/business/economics/article/liz-truss-bond-crisis-bis-s8wj3tm39
“AI boom risks global financial crash, warn central bankers…
““Financial stability could …be at risk in the event of an AI bust,” the BIS said. “Should hyperscalers slow or halt the aggressive pace of capex deployment, many borrowers across the supply chain could struggle to replace lost revenue and service their debt.”
“The Trillion-Dollar Borrowing Binge Lifting the Stock Market to Risky Heights.
“U.S. margin debt surged 54% year-over-year to a historic record of $1.4 trillion, fueling a massive leverage wave that has propped up the stock market while exposing it to steep vulnerabilities. Investors are aggressively leaning on brokerages and complex financial derivatives to supercharge returns, mirroring hyper-speculative market peaks of the past.”
“Private Credit Is Making Bets on Consumer Debt at a Precarious Time.
“Major private debt firms like Blue Owl and KKR are funnelling billions of dollars into asset-backed finance (ABF) structures, specifically targeting Buy Now, Pay Later (BNPL) platforms and credit card debt. This aggressive expansion represents a critical inflection point for alternative asset managers shifting away from corporate direct lending.”
“Sovereign investors with US$29 trillion pivot to energy assets, flag dollar fears.
“Sovereign wealth funds and central banks managing US$29 trillion in assets are turning to energy assets, and raising concerns about the dollar, in a portfolio reassessment driven by unprecedented geopolitical shifts…”
“Oil Markets Are Pricing A Supply Surge That Isn’t Guaranteed…
““The market is largely focused on the resumption of oil flows through the Strait of Hormuz, which continues to increase,” the Dutch bank’s commodity team wrote today. “However, much of the increase reflects previously stranded vessels leaving the Persian Gulf. Vessel flows into the Gulf remain much more modest.””
“Freight shipping costs surge as companies race to beat new Trump tariffs.
““Uncertainty around tariffs and bunker costs has triggered frontloading of cargo, particularly into the US, pushing freight rates sharply higher,” said BIMCO, the largest shipowners’ association.”
https://www.ft.com/content/8bf7cfa4-5412-41d3-b84e-e89f84265fe8
“America seeks its McDonald’s model for missile making…
“…the US does not produce enough missiles, and those that it does are eye-wateringly expensive. As the country’s munitions stockpiles dwindled during the conflict with Iran, finding ways to produce quickly, cheaply and at scale has become an increasingly urgent challenge.”
https://www.ft.com/content/06cf309b-ff32-4698-8bc3-232086063b51?syn-25a6b1a6=1
“Burnham’s rise revives talk of war bonds to fund the UK military…
“War bonds would effectively be gilts, sold to the public, with the proceeds going straight to Britain’s creaking defense sector. The UK public is sitting on hundreds of billions of pounds in savings accounts and the theory goes that many people would be tempted by patriotic fervor…”
https://fortune.com/2026/06/28/andy-burnham-war-bonds-funding-uk-military-budget-nato/
“Call for political stability to help farming industry [UK].
“Rob Halliday, a livestock farmer in Quethiock, said the roadmap had some good ambitions but feared it could fail to be implemented properly. “We’ve had so many changes – 10 environment secretaries in 10 years,” he said. “Every time we have a new secretary, things tend to be shelved and there’s new ideas.”
https://www.bbc.co.uk/news/articles/cly89ve0zjgo
“Extreme heatwave across Europe raises energy and inflation concerns.
“An unprecedented heatwave sweeping across Europe is putting pressure on energy infrastructure, disrupting nuclear power generation and reinforcing concerns that climate-driven supply shocks could become a renewed source of inflation.”
“Europe risks starting winter with gas stocks at 15-year low.
“As of late June 2026, energy consultancies like Wood Mackenzie forecast that the European Union’s storage facilities will peak at just 76% full by the end of the traditional restocking season in October. This would mark the lowest peak level since at least 2011.”
https://www.ft.com/content/06304ad6-3841-4d5a-933a-6e750f536eaf?syn-25a6b1a6=1
“EU confronts ‘China shock’ ahead of pivotal Brussels trade talks.
“European Union leaders had a week to bask in their rare, relatively united stance on China policy before news broke to remind them of the urgency of their task: German car giant Volkswagen was reportedly planning up to 100,000 job cuts in the face of cutthroat Chinese competition.”
“Kushner-linked protests reveal depth of anger at Albanian leaders…
“The rallies, dubbed the Flamingo Revolution — after the birds whose habitat is threatened by coastal development — are unprecedented in a country that has experienced periods of significant political and economic turmoil since the fall of communism in 1992.”
https://www.japantimes.co.jp/news/2026/06/29/world/politics/kushner-protests-anger-albania-leaders/
“Serbia: Protests continue after Vucic says he will step down…
“Vucic has branded protesters “foreign agents” who seek to overthrow the government, and has rejected calls for early elections before he is officially due to step down in 2027. However, on Saturday, Vucic told his supporters at a pro-government rally in Belgrade that he would be president “for only a couple more weeks.””
https://www.dw.com/en/serbia-protests-continue-after-vucic-says-he-will-step-down/a-77746666
“Russian gas tanker fitted with guns in ‘warning to NATO.
“A Russian natural gas tanker has been sailing along the coasts of NATO members Finland and the Baltic states with heavy machine guns on board. Documents seen by FTM also reveal that Russian military personnel are on board.”
“Ukraine flexes regional might with tougher stance on Belarus.
“Ukraine has shifted its strategy toward Belarus from a position of cautious avoidance to one of direct confrontation and ultimatum-based pressure. This foreign policy shift highlights Kyiv’s growing confidence as a regional power capable of enforcing its security boundaries against neighbours aiding Russia’s invasion.”
“Russia’s Fuel Crisis Raises New Risks for Global Grain and Energy Markets.
“A reduction in diesel exports could tighten global refined fuel supplies, increase shipping and logistics costs, and raise operational expenses throughout the agricultural value chain. That matters because diesel fuels nearly every stage of food production, from planting and harvesting to grain hauling, export logistics, and food distribution.”
https://www.agrolatam.com/amp/russia-diesel-export-ban-global-agriculture-impact/
“Putin vows to keep fighting despite ‘new Ukraine strike halt plan’.
“President Vladimir Putin said on Sunday that Russia will press ahead with its battlefield aim of fully capturing four Ukrainian regions, rejecting what he said was a new proposal by Ukraine to rein in hostilities in the more than four-year-old war.”
https://tvpworld.com/94070942/putin-vows-to-keep-fighting-despite-new-ukraine-strike-halt-plan
“China, Russia hold joint air drill over Sea of Japan, western Pacific Ocean…
“In a related development, South Korea claimed that 10 Chinese and Russian military aircraft “briefly” entered and left its air defense identification zone (KADIZ) above the country’s eastern and southern waters.”
“China blacklists more Japanese entities as row deepens…
“China has stepped up restrictions against Japan since Prime Minister Sanae Takaichi’s remarks last November that Tokyo could hypothetically intervene militarily in a crisis over Taiwan. Dual-use goods refer to products, technologies and materials with both civilian and military applications.”
https://www.japantimes.co.jp/business/2026/06/29/economy/china-japan-defense-export-controls/
“Japan protests against China’s maritime claims near southern island…
““We have confirmed that China Coast Guard vessels have intermittently navigated within Japan’s exclusive economic zone (EEZ) south of Yonaguni Island and have made unilateral claims regarding those waters,” Chief Cabinet Secretary Minoru Kihara said at a regular press conference on June 29.”
“How war and poverty are driving Myanmar’s drug crisis…
““Amid political instability and conflict, drugs have become integrated into everyday life. There are even cases where entire families are using together. It’s an invisible, chronic disease — the moment you touch it, it becomes a lifelong affliction.””
https://www.ucanews.com/news/how-war-and-poverty-are-driving-myanmars-drug-crisis/113825
“Heavy militarisation, mock drills raise fears of false flag in Kashmir.
“Indian forces and police conducted a large-scale multi-agency mock drill, widely described by locals as a “war drill”, in Parimpora and Maloora areas of Srinagar on Sunday, as part of intensified military preparations ahead of the annual Hindu Amarnath Yatra in Indian illegally occupied Jammu and Kashmir.”
“Pakistan carries out deadly airstrikes along Afghanistan border.
“Pakistani strikes in three eastern provinces of Afghanistan killed 36 civilians and wounded 163, the Taliban government’s deputy spokesperson said on Monday, as attacks between the two countries showed no sign of abating.”
https://www.theguardian.com/world/2026/jun/29/pakistan-deadly-airstrikes-afghanistan-border
“Renewed Strikes Threaten to Set Back Shipping Recovery in Persian Gulf…
““Shipping is literally caught in the crossfire as the U.S. and Iran battle for control of Hormuz strait,” said Michelle Wiese Bockmann, an analyst at Windward, a maritime intelligence firm. “This does little to restore confidence that security and safety can be guaranteed to get stranded ships out.””
https://www.nytimes.com/2026/06/27/business/strait-of-hormuz-shipping-iran.html
“Shadow war: how use of proxy forces by Iran, Israel and US is driving Middle East instability…
“Across the region there is a push to disarm militia and reinforce state authority to offset growing instability, but the temptation to use proxies remains despite the obvious risks. Recent and continuing conflicts in Syria, Libya, Sudan and elsewhere have all seen their extensive use.”
https://www.theguardian.com/world/2026/jun/28/gulf-us-iran-war-proxies-middle-east
“Iran has no choice but nuclear bomb – IRGC media…
“The outlet argued that Iran must achieve nuclear deterrence to gain what it called the “calm needed” to ensure other disputes can be resolved through negotiations. Fars wrote that only under such conditions would negotiations be possible from the “right position.””
https://www.iranintl.com/en/202606283302
“Iraq arrests protesters as unrest spreads over power cuts…
“The protests are part of a broader wave of anger over Iraq’s worsening electricity crisis as temperatures reach 48 degrees Celsius. Electricity supply has reportedly fallen to as little as four hours a day in some areas, prompting nightly demonstrations in Wasit that have since spread to parts of neighbouring Babil province.”
https://www.newarab.com/news/iraq-arrests-protesters-unrest-spreads-over-power-cuts
“In Lebanon, framework agreement signed with Israel spurs protest, criticism.
“After the governments of Lebanon and Israel on Friday signed a United States-brokered framework agreement following months of direct negotiations, protesters took to the streets of the Lebanese capital to express their anger at the deal.”
“Powerful blast heard across northern Israel as IDF destroys Hezbollah’s ‘drone fortress’ in Lebanon.
“The underground compound, built more than 25 meters below ground and stretching over 200 meters, was used to store weapons, including drones, warheads and explosives. The powerful blast was heard across northern Israel on Sunday evening.”
https://www.ynetnews.com/article/hjqfumkxmx
“Israel says troops kill armed militants in southern Syria, vows continued military presence.
“The Israeli military said on Sunday that its forces killed several armed militants in southern Syria a day earlier, as Israel reaffirmed its intention to maintain an open-ended military presence in territory it has occupied since late 2024.”
https://www.kurdistan24.net/en/story/922535
“Armed conflict threatens Ethiopia’s ancient monasteries.
“Lake Tana in Ethiopia’s Amhara region was once a tourist hotspot, known for its picturesque shorelines and monasteries dating back to the 14th century. But since 2023, an ongoing war between the Fano militias and federal government forces has scared away the tourists.”
https://www.france24.com/en/armed-conflict-threatens-ethiopia-s-ancient-monasteries
“‘Digging with a needle’: Generals stall peace as Sudan’s el-Obeid burns…
“Despite mounting international alarm and renewed US diplomatic pressure aimed at securing a nationwide truce, Sudan’s warring generals remain deeply entrenched. Both the Sudanese Armed Forces (SAF) and the RSF appear locked in a pursuit of outright military victory…”
“Mali: Grave Abuses Amid Renewed Fighting…
““As fighting flares up again, the warring parties in Mali are once again carrying out grave abuses against civilians, repeating former patterns of harming civilians,” said Ilaria Allegrozzi, senior Sahel researcher at Human Rights Watch.”
https://www.hrw.org/news/2026/06/28/mali-grave-abuses-amid-renewed-fighting
“Sahel: how the return of El Niño could exacerbate instability…
“Looking at food insecurity, says Bigi, the already critical situation in the Sahel could worsen ‘thanks to’ the arrival of El Niño in a region already burdened by a combination of ‘demographic pressure, conflicts, displacement, economic shocks and restrictions on humanitarian access’.”
“Tanzania hit by nationwide blackout following major national grid failure.
“The infrastructure collapse has renewed sharp criticism regarding the stability, maintenance, and reliability of the country’s distribution networks… aging infrastructure remains highly vulnerable to catastrophic failures.”
“‘If I am to die, let it be here’: Malawians fleeing unrest in South Africa…
“The Malawi government is facilitating the return of thousands of its citizens, many of whom have worked for years in South Africa’s informal sector. Well-wishers have also raised money to help bus stranded Malawians back home.”
“Government loosens dollar lending rules, raising echoes of 2001 crisis [Argentina].
“President Javier Milei amended a regulation that had been in place since the 2001 crisis, which restricted access to dollar-denominated credit to companies able to demonstrate income in that currency. The rule was intended to prevent borrowers from assuming foreign-currency liabilities without a natural hedge against exchange-rate risk.”
“‘Struggle continues’ in Bolivia’s Morales heartland…
“Supporters of ex-leader Morales — whom Paz blames for fomenting the recent unrest — line Chapare’s winding roads, ready to reinstate protest blockades at a moment’s notice. These coca growers wave signs calling for Paz to resign and are cheered on by other locals.”
https://www.france24.com/en/live-news/20260627-struggle-continues-in-bolivia-s-morales-heartland
“How Venezuela’s earthquakes have shaken President Delcy Rodriguez…
“For interim President Delcy Rodriguez, the disaster marks the biggest challenge of her presidency so far. As the death toll rises and rescue efforts continue, she faces growing pressure to show her government can coordinate an effective response.”
“How did Colombia’s election split a nation in two?
“Colombia just had the closest vote in its history. A right-wing political outsider with a Trump endorsement beat a left-wing veteran by less than a point. What does it mean for Colombia and for the Latin American left?”
“New Caledonia election tests territory’s future after unrest and deadlock.
“New Caledonia goes to the poll on Sunday in crucial elections. The possibility of independence from France remains the central political issue, with today’s vote taking place peacefully. The election comes two years after plans to expand voting rights to thousands of non-Indigenous residents triggered deadly unrest…”
“Big oil’s secretive trading arms are having an extraordinary year.
“Oil majors have two ways to make big money during an energy shock. One is to sell the hydrocarbons they pump and refine themselves. The other is to buy barrels that others produce and flog them to whoever wants them most. The third Gulf war has demonstrated just how important the latter has become as a source of profit for the industry…”
“The World Is Racing to Develop New Nuclear Fuels…
“In January 2026, the U.S. Department of Energy (DoE) earmarked $2.7 billion to expand domestic uranium enrichment capacity over the next decade. Meanwhile, in the United Kingdom, the government announced in January 2024 that it would allocate £300 million to support HALEU production.”
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You can read the previous “Economic” thread here. I’ll be back tomorrow with a “Climate” thread.
After reading the brutally honest UN GLOBAL WATER BANKRUPTCY report, I have further revised down my longevity expectations for industrial civilisation. One graph as an illustration of the general message: water related conflicts have risen steadily from about 150 in 2020 to 400 in 2024. It’s a similar rate of rise to the number of extreme drought/flood events in the same period, but not completely a consequence, as most of the water problems are from overuse of water leading too drying lakes and rivers, falling aquifers and salinisation of estuaries and irrigated lands. Just loss of irrigated agricultural land will halve food production well before 2100. Even its hopium is down market: water can be a focus for us all to jolly well roll up our sleeves and face the future together.
One thing not covered (so maybe a lesser issue) is irrigation pumps. I have read that before aquifers get exhausted they often get so deep that the pumps have to be switched to more expensive types with significantly higher energy and operating costs. In sub-Sahara and South East Asia pumps are still mostly diesel. The rising costs mean the farms go bankrupt even if there is still some theoretically available water.
The groundwater issue may play out over the coming decades but the coming year looks like it’ll present a combination of issues seldom if ever faced: complete fractionation of geopolitical orders, killer heat, killer droughts/floods, step change in refugee numbers, step change in conflicts, housing, debt and tech bubbles popping and ultimately they all lead to famines as the final arbiter.
It looks like the combined countries outside the Persian Gulf are post peak oil and with accelerating decline from about 4-5% per year. So the biggest effect of the Hormuz closure may be a lack of buffer capacity in the coming years even if the Gulf can recover, and even increase in some cases, production. Projects in development or awaiting FID have tailed off even faster than it looked a couple of years ago, and I haven’t seen a single announced discovery from this year’s high impact wells, so far. Petrobras have a pretty flat production forecast for Brazil to 2030 (and then it will probably start to fall). Guyana/Suriname have three more FPSOs I think (but early projects are now coming off plateau) , Namibia looks disappointing.
Everyone will dead or wish they were by 2040.
“Everyone will be dead, or wish they were, by 2040” … because our ideas are more provincial than those of Medieval peasants who have never left their local hamlet:
What a piece of work is Man. How ignoble his treason, how limited in faculty; in form of moving how crippled by machine-dependence; In action how like a fallen angel; In apprehension how like a clod; The pariah of the world, The basest of animals. This quintessence of dust has proved to be no other thing than a foul and pestilent congregation of lepers.
I saw an African tribe’s warriors being exhorted to fight by their leader… what would they do to show their approval?
Shake spears.
George, that is a very nice summary of our rapidly converging crises in your penultimate para. Re peak oil, John Kemp has an interesting post on Linkedin:
“Oil and Gas Investment and Field Decline Rates. Global oil and gas producers need to invest more than $500 billion each year just to sustain output in the face of natural declines from existing fields as pressure falls, according to estimates prepared by the International Energy Agency.
“Since 2019, upstream investment has averaged about $550 billion per year — but nine-tenths has gone towards replacing declining production with only one-tenth directed to projects expanding supply. Between now and 2050, producers would need to invest around $540 billion per year, adjusted for inflation, to keep oil and gas production around current level.”
https://www.linkedin.com/feed/update/urn:li:activity:7476899705101340672/
The problem with that estimate is that it ignores the orgy of destruction in Russian, Mideast, Iranian, & Ukrainian oil refining and production facilities. With no indication that their operations will resume, nor that the aggressor nation of USrael has the least intention of relenting in its efforts to utterly destroy Iran, nor Ukraine/NATO’s & Russia’s insistence on immolating one another. When an LNG tanker captain thinks it’s a good idea to carry live ammunition on board what is basically a floating bomb, all rationality has left the room.
Contingent to that increased risk are the increased shipping, insurance, and security costs that are already being borne, all of which increase the costs even were the price per barrel to return to its pre-war level (which would take demand destruction on such a scale as to make a depression inevitable).
Rob, good point. It is very much a single-focus analysis. There are some fast approaching climate limits to production, too, of course.
I was accused of “zero-sum” thinking because I brought up high EROI oil depletion in the context of “who’s to blame for the Iran thing” – I was supposed to say Trump and/or Israel, obviously. They clearly do not understand what zero-sum means. It’s a competitive scenario, which has nothing to do with pointing out that a resource is running out.
A limited supply of resources can be the basis for such a scenario, but does not constitute it per se. It is telling however that people nevetheless tend to think so, and protest too much.
Jupiviv, global economic growth is closely correlated with growth in energy consumption, so geopolitical friction is a given in a world of dwindling energy surplus. I know I’m preaching to the choir there.
It’s very hard to say, though, to what degree that dynamic is triggering or driving any given conflict. The nuttiness of decision-making by those in power can be a wild card.
As someone outside of the UK, is there a reason Liz Truss continues to get dragged? I understand it was a quick, unproductive and unpopular tenure as PM but I’m under the impression that she inherited a system that was circling the drain anyway. It seems she’s always the comparison for all sorts of crises, and every other economic thread has the iconic thumbnail of whichever newspaper’s headline.
In other news, I saw a few wildflowers in the wild that I’ve always wanted to see, and I saw my first scarlet tanager.
John, that is a gorgeous looking bird. They’re not particularly rare here but I was admiring a rather striking pair of goldfinches out on the dog-walk today.
Re Lynn Truss, she was repeatedly warned that her unfunded tax cuts would spook the markets but did it anyway. The UK certainly has, and had, deep structural problems but she turned a slow-burning problem into an immediate crisis. There were almost immediate ramifications for me, as my mortgage came off fixed rate shortly after the debacle. I pay about an extra £120 per month because of it. Thanks, Lynn. 🙄
Maybe it’s this:
https://robertlowrey.blogspot.com/2022/10/separated-birth-bride-of-chucky-and-liz.html
The proper response to the twin earthquakes is the rapid importation of hundreds of pieces of heavy equipment: cranes,excavators, bulldozers, dump trucks, giant diesel generators, water filtration, air conditioning tents for hospitals and cooling areas, plus mind boggling amounts of diesel and gasoline fuels. Venezuela can’t afford any of this equipment, much less adequate nutrition,medical aid, purified water and reasonable power.
I expect Venezuela to decline to Haitian conditions in relatively short order. Time will tell…
Bob Shaw Are Humans Smarter than Yeast?
Bob, “More than 68,000 people are reportedly still missing in Venezuela after two earthquakes devastated parts of the country earlier this week.” 😬
https://www.euronews.com/2026/06/28/more-than-68000-people-still-missing-in-venezuela-after-devastating-earthquakes
‘Let’s see if DC Rodriguez can get “her” foreign-installed gov’t to co-ordinate an effective response” … ie, make sure the oil sector’s pumping continues unabated.
I’m ok smart. But I’m not so smart that there should be this many people so much dumber than me.