Increasing concerns over a US economic slowdown (or just a reminder a hard landing is still possible) triggered a broad selloff in global stocks overnight and into the US premarket session. 

Investors’ anxieties soared late Thursday afternoon following dismal earnings reports from Amazon and Intel. Corporate earnings have so far indicated that US consumers are struggling, and it seems only a matter of time before Goldman Sachs advises clients to short stocks with the highest exposure to high-income consumers, already telling clients to short low– and mid-income consumer stocks in recent months. 

Highlighting comments from Wayfair CEO Niraj Shah, an earnings press release on Thursday stated, “Customers remain cautious in their spending on the home, and our credit card data suggests that the category correction now mirrors the magnitude of the peak to trough decline the home furnishing space experienced during the great financial crisis.” 

In an interview with CNBC, Wayfair CFO Kate Gulliver warned, “We see declines that are similar to the declines that we saw in that 2008 to 2010 period and I think what that speaks to is that the category has been going through just a massive correction, a correction that we’ve previously only seen during a GDP recession.” 

Gulliver continued, “Obviously we’re not technically in a GDP recession as a country right now, and so this is somewhat a unique thing to this category … we’ve seen that kind of recession-like correction in the category over the last few years.”

Separately, Goldman’s Scott Feiler told clients this AM, “The big topic all of a sudden the “last few days” is around the health of the consumer.” 

Feiler said, “The slowdown has broadened out and picked up further in June/July, led by a lot of bellwethers. That alone should not be a huge debate. The debate should be intensity and whether it’s priced in.” 

As for Wayfair’s second-quarter earnings report, Goldman’s Eric Sheridan said, “Wayfair produced disappointing topline results as revenue declined nearly -2% YoY with demand softening through the quarter despite a successful Way Day in early May (up DD% vs. 2023) as consumers proved increasingly price sensitive and pulled back further outside of promotional events.” 

Sheridan said, “We reiterate our Neutral rating and reduce our price target from $67 to $54 mainly from lower operating estimates.” 

Meanwhile, darkening clouds continue to gather over the US economy following this AM’s payroll report, which shows a big slowdown in employment and a higher unemployment rate, so much so that recession risks are rising. 

Authored by Lance Roberts via RealInvestmentAdvice.com,

Economist Claudia Sahm developed the “Sahm Rule,” which states that the economy is in recession when the unemployment rate’s three-month average is a half percentage point above its 12-month low. As shown, the latest employment report has triggered that indicator.

So, does this mean a recession is imminent? Maybe. However, we can now add this indicator to the long list of other recessionary indicators, also flashing warning signs.

As discussed in “Conference Board Scraps Its Recession Call,” the Leading Economic Index (LEI) has a long history of accurately predicting recession outcomes. As we showed, each previous decline in the 6-month rate of change in the LEI from the Conference Board has aligned with a recession. We are currently in one of the most extended periods on record where the LEI reading has remained below zero but without a declared recession.

We also discussed the inverted yield curve, which suggests that recession risks remain. To wit:

“While the Conference Board has abandoned its recession call, the bond market has not. The yield spread between the 10-year and 2-year Treasury Bonds remains deeply inverted. Notably, the inversion is NOT the recessionary warning. It is when that yield-curve UN-inverts that signals the onset of a recession. Such has historically occurred in response to Federal Reserve rate cuts to try and offset a rapidly slowing economy.”

Rate Cuts Coming

With the Fed getting ready to cut rates for the first time since 2020, will the yield curve’s un-inversion again signal a recessionary onset?

So far, the economy has defied recessionary expectations. That was due to the flood of monetary stimulus from the Inflation Reduction Act and the CHIPS Act and a surge in deficit spending, which supported economic growth. However, that expenditure surge has now peaked and turned lower, dragging on economic growth in the future.

We see that same support to economic activity in the monetary supply (M2) as a percentage of the economy. While those monetary and fiscal supports caused economic growth to surge following the “pandemic-related” spending spree, both are reversing.

However, as the monetary stimulus reverses, the risk of a recession increases as consumption slows.

That is why the “Sahm Rule” and employment in general are among the most critical recessionary indicators.

Why Is Employment So Important?

The U.S. is a consumption-based economy. Critically, consumers can not consume without producing something first. Production must come first to generate the income needed for that consumption. The cycle is displayed below.

Of course, if you bypass the production phase of the cycle by sending checks directly to households, you will get a strong surge in economic growth. As shown in the M2 to GDP chart above, the massive spike in economic growth in the second quarter of 2021 directly resulted from those fiscal policies.

However, once individuals spent that stimulus, economic activity subsided as the production side of the equation remained lagging. Here is the crucial point about employment and why the “Sahm Rule” matters.

“For a household to consume at an economically sustainable rate, such requires full-time employment. These jobs provide higher wages, benefits, and health insurance to support a family. Part-time jobs do not.”

While the media touts the ‘strong employment reports,’ such is mostly the recovery of jobs lost during the economic shutdown. However, the reality is that the full-time employment rate is falling sharply. Historically, when the rate of change in full-time employment dropped below zero, the economy entered a recession.

Notably, given the surge in immigration into the U.S. over the last few years, the all-important ratio of those employed full-time relative to the population has dropped sharply. As noted, given that full-time employment provides the resources for excess consumption, that ratio should increase for the economy to continue growing strongly. However, full-time employment has decreased since the turn of the century as automation, technology, and offshoring have risen. While President Biden recently touted strong employment growth in his SOTU address, full-time employment as a percentage of the working-age population failed to recover to pre-pandemic levels.

Notably, sharp downturns in full-time employment have coincided with recessionary onsets. Such should be unsurprising as corporations scale back on labor, their most considerable expense, as consumer demand falls.

No Job = No Income

The problem with declines in full-time employment is that, as noted, it negatively impacts economic consumption. While the current administration has been able to offset that decline with a massive increase in deficit spending, the latter is not sustainable. Combine that with the decline in wage growth, and the potential stress on the economy becomes more apparent. As shown, compensation continues to decline even as price inflation remains elevated, which weighs on consumers’ ability to maintain their living standards.

However, that chart is a bit deceiving as it reflects all compensation and wages. Twenty percent (20%) of income earners have seen wages increase, particularly for “C-Suite” executives. However, for the bottom eighty percent (80%) of employees, the decline in wage growth is quite dramatic and on par with previous recessions.

As noted, as the economy slows, employers look to reduce the most costly aspect of any business – employment. Cutting full-time jobs is the most efficient way to protect earnings and profitability. While employers tend to hang on to employees as long as possible, employees eventually get sacrificed when protecting profits. As such, a reasonably predictable cycle continues until exhaustion is reached.

Conclusion

However, it is worth noting that while full-time employment is declining as the economy slows, temporary help is also declining. In other words, companies are slashing employment at all levels, which doesn’t support the “strong economy” narrative.

The decline in wages and jobs should be unsurprising. Small businesses comprise 50% of the employment makeup and have failed to see the surge in sales growth touted by the mainstream media. While they initially raised wages to attract talent following the shutdown, that is beginning to reverse as sales fail to materialize.

While there may not be any indication of a recession in the next 12 months, according to mainstream economists, it is likely worth paying attention to what is happening in employment since nearly 70% of economic growth is derived from consumption. The “Sahm Rule” is another essential indicator suggesting that underlying economic weakness is more significant than the headlines suggest.

Sure, this “time could be different.” The problem is that, historically, such has not been the case. Therefore, while we must weigh the possibility that analysts are correct in their more optimistic predictions of a “soft landing,” the probabilities still lie with the indicators.

While the LEI and inverted yield curves suggest that the “conditions” for a recession are present, the “Sahm Rule” and measure of full-time employment tend to be the “evidence” of one.

Of course, this is probably why the Federal Reserve is pushing to cut rates even though inflation remains well above its target.

Bye-bye, Governor Gavin Newsom. 

After more than a century of operations in California, energy giant Chevron announced that it will move its San Ramon headquarters to Houston, Texas. Bloomberg states the move was primarily due to the state’s “adversarial” regulations toward the fossil fuel industry. Chevron’s move is more evidence the multi-year mass exodus of companies and residents fleeing the high tax and high crime state is still underway. 

“There will be minimal immediate relocation impacts to other employees currently based in San Ramon. The company expects all corporate functions to migrate to Houston over the next five years,” Chevron wrote in a press release. 

The San Ramon headquarters currently has 2,000 employees. These employees will likely be transferred to Houston in the coming years, where the company currently has about 7,000 employees.

Chevron’s history dates back to the 1870s, when Standard acquired small California-based oil companies and merged them into Standard Oil of California. 

“In other words, Standard Oil Company of California waivea goodbye to its state,” one X user wrote. 

Chevron to move headquarters from California to Texas

In other words, Standard Oil Company of California waivea goodbye to its state.$CVX
https://t.co/5aM4lrr4j5 via @ft

— L.C. (@LouisCyprien) August 2, 2024

Texas Attorney General Ken Paxton wrote on X, “Welcome to Texas, Chevron.” 

Welcome to Texas, @Chevron https://t.co/q5I032HSlq

— Attorney General Ken Paxton (@KenPaxtonTX) August 2, 2024

Chevron has previously slashed oil-refinery investments in California because of “adversarial” policies toward fossil fuels. 

“California’s policies have made it a difficult place to invest so we have rejected capital projects in the state,” Andy Walz, president of Chevron’s Americas Products business, wrote in a filing in late 2023. He added, “Such capital flight reflects the state’s inadequate returns and adversarial business climate.”

Chevron provided no further information about the reason behind the California exodus, but as the company’s executives have said in the past, the Golden State’s regulatory regime has made it nearly impossible to do business. We suspect execs are also fed up with progressive personal income tax law and failed social justice and criminal justice reforms that have only sparked a state-wide crime tsunami. 

Children living in tents and roaming the streets of California’s Skid Row. America, we have a problem. pic.twitter.com/jn2mCBng6i

— Jonathan Choe (@choeshow) June 17, 2024

Just last month, Elon Musk announced plans to pull SpaceX out of California. He said the rocket company’s headquarters in Hawthorne, California, will be shifted to Starbase, Texas. 

This is the final straw.

Because of this law and the many others that preceded it, attacking both families and companies, SpaceX will now move its HQ from Hawthorne, California, to Starbase, Texas. https://t.co/cpWUDgBWFe

— Elon Musk (@elonmusk) July 16, 2024

What’s clear is that the ‘Great California Exodus’ – supercharged during Covid – but has been in play for nearly two decades – continues to this day. Far-left Democrats imploding the state are great at convincing everyone of a ‘utopian society with equality for all’ – but in reality – are horrible managers – and do not understand business, nor are their policies rooted in reality. 

With that being said, bye-bye, Gov. Newsom. 

Standard Oil of California of Texas.

Another home run for Gavin

— zerohedge (@zerohedge) August 2, 2024

We suspect this trend is far from over. 

Authored by Sean Trende via RealClearPolitics,

We all know that this election will be different than any other election we’ve had in recent decades – how could it not be? This is a 100-day campaign through Election Day, and a 45-day campaign until early voting begins. The dynamics are fundamentally different than your average modern campaign.

I’ve been struggling to characterize exactly how the dynamics animating this campaign are different. What I’ve come up with is this: This campaign is a lot like the old kids’ game of “don’t let the balloon touch the ground.” In the event you aren’t familiar with that competition, the rules of the game are remarkably straightforward: Kids bounce a balloon around, and they do so until the balloon touches the ground. In the long run, kids can’t really win the game, as gravity inevitably wins out. But if the goal is to pass time while parents pull together some last minute aspect of the party, the kids can theoretically win.

Right now, Kamala Harris is in her honeymoon phase. She’s been elevated from the vice presidency to presumptive Democratic nominee. This has been accompanied by an improvement in her job approval as she rides a groundswell of good press and has the opportunity to re-introduce herself to the American public. Her stock has risen accordingly.

At the same time, she is probably too far to the left to win a general election. She hasn’t really shown Barack Obama’s knack for knowing when he needed to hedge his position or even rule out something to his left because it would alienate a key electoral constituency. To be sure, there are people who don’t really believe that “too far left” is a category that exists (a lot of people on the right believe something similar); if you’re one of them then the entire frame of this article and theory of the campaign are incorrect. But within that frame, having the election turn to a referendum on Harris’ positions and record, which really have been on the left flank of the Democratic Party, is the equivalent of the ball touching the ground. If those positions are what the election is about, her path to victory becomes much more complicated.

As I’ve written before, I don’t think Harris is probably viable over the course of a year-long campaign. There’s a reason she was polling at 3% (barely ahead of Andrew Yang) in the 2020 Democratic primary when she dropped out.

She doesn’t have to run a year-long campaign, though. As it turns out, events line up in the political calendar in such a way that it really is possible to keep the balloon bouncing. Consider: Harris will almost certainly pick her vice presidential candidate this week. She has a large number of attractive choices from which to select, which will earn her another week or two of positive press.

That gets us to mid-August, when the Democratic National Convention begins. It will likely be a carefully scripted, well-managed event. There’s little doubt that Barack Obama, Bill Clinton, and Hillary Clinton will all deliver well-crafted prime-time addresses to rally the party behind its new nominee, as will Harris and her running mate. She might not receive a bounce, since she’ll still be in her honeymoon phase, but the balloon will be saved from the floor once again.

Then, in mid-September, Trump will be sentenced following his conviction in the New York fraud/hush money case. Regardless of whether or not he receives jail time, it’s another distraction from any substantive discussion of the issues in 2024. The attention is diverted from Harris and falls on Trump in a relatively unflattering light. The ball is kept off the ground again; the election actually shapes up as a referendum on Trump at this point.

At that point, we begin to vote. With extended early voting timelines, Pennsylvania starts voting in mid-September, followed by Minnesota, New Mexico, and Virginia starting a few days later. At the beginning of October, Arizona, Georgia, and Ohio start accepting ballots.

In short, we can’t think of this campaign as a traditional campaign. It’s a sprint, and a shorter sprint than people acknowledge. Harris might not be able to keep the ball bouncing through November, but she might not have to. Events are lining up to at least keep things going through a sizeable chunk of what has now become an election season.

Sean Trende is senior elections analyst for RealClearPolitics. He is a co-author of the 2014 Almanac of American Politics and author of The Lost Majority. He can be reached at strende@realclearpolitics.com. Follow him on Twitter @SeanTrende.

Authored by Jana J. Pruet via The Epoch Times (emphasis ours),

Thousands of unlicensed marijuana shops opened in New York City after the state legalized recreational use of the drug in 2021. New state regulations are allowing officials to crack down.

The city sheriff’s office said it has closed about 700 illegal stores since the new rules were enacted in April. The unsanctioned shops proliferated across the Big Apple when the city’s legal power had been limited and the legal market was mired in red tape.

There were nearly 3,000 unlicensed marijuana shops throughout New York City and about 60 licensed dispensaries, the sheriff’s office estimated.

Licensed operators say the city is bringing order to the cannabis industry. 

Sasha Nutgent, retail director of Manhattan’s Housing Works Cannabis Co., which made the state’s first legal marijuana sale in December 2022, said enforcement had been “kind of a joke, and now it’s not.”

Although New York state legalized marijuana three years ago, regulations did not give local law enforcers much power to punish unlicensed distributors. That duty was assigned to the state Office of Cannabis Management. 

Strict licensing requirements combined with bureaucratic delays and lawsuits slowed the opening of legal dispensaries. New York Gov. Kathy Hochul described the rollout as a “disaster.”

New York now has about 150 dispensaries statewide compared to approximately 1,200 in California, which also has struggled to shut down illegal shops.

New York City and state officials have promised tough enforcement in the past. Last year, lawmakers expanded the state’s powers for inspections, seizures, and fines, which led to some store closures. Manhattan’s district attorney sent hundreds of sternly-worded letters to landlords.

Still, many stores remained open during lengthy appeals despite the threat of eviction or fines.

The new state rules have allowed local authorities to padlock stores while administrative hearings play out. The sheriff’s office no longer requires a court order to inspect businesses. This allows it to raid illegal retail stores and seize products quickly.

A lawsuit filed in federal court by two dozen shuttered stores argues that the city is denying them due process. The law firm representing the stores declined to comment.

The sheriff’s office says it has issued more than $57 million in violations since April, but it’s not clear how much has been collected. The office declined to comment, referring questions to City Hall, which said 15 teams of deputies and New York Police Department officers are being sent out daily.

“If you are operating an illegal cannabis business, our administration is sending a clear message: You will be shut down,” the office of Mayor Eric Adams said in a statement.

City Council Member Gale Brewer, who tried for two years to shut down an unlicensed marijuana shop across the street from her office on Manhattan’s Upper West Side, says the latest effort is finally helping.

“There’s no question about it,” she said.

Big Tech’s AI arms race has a significant energy cost. For example, a study found that training OpenAI’s GPT-4 used up to 62,000 megawatt-hours, equal to the energy needs of 1,000 U.S. households over 5-6 years.

And, as Visual Capitalist’s Pallavi Rao details below, this can be seen when tracking Microsoft’s electricity use (in terawatt-hours) and related carbon emissions (in million metric tons of CO₂e) in the last four years.

Data is sourced from the company’s 2024 Sustainability Report, and covers FY 2020–23. Microsoft’s financial year runs from July 1st to June 30th.

AI Push is Putting Pressure on Microsoft’s Emissions Targets

In just four years, Microsoft’s electricity consumption has more than doubled from 11 TWh to 24 TWh. For context, the entire country of Jordan (population: 11 million) uses 20 TWh of electricity in a given year.

This electricity usage jump is accompanied by a 42% increase in total carbon emissions—indicating a relative growing share of renewable energy sources.

Note: Figures rounded.

Both trends coincide with Microsoft Azure’s use to train and run AI models, of which OpenAI’s ChatGPT is the most prominent.

In fact, Microsoft spent “hundreds of millions of dollars” to develop a super computer just for ChatGPT, which involved linking thousands of Nvidia GPUs.

Training AI models requires a lot of compute. The data centers built to provide said compute are more power hungry than those providing traditional email or website services.

In fact, just the construction of Microsoft’s data centers has accounted for 30% of the emissions increase between 2020–23.

This emissions increase comes after Microsoft stated ambitions of becoming carbon negative by 2030. Meanwhile, Google is in a similar quagmire. It, too, aimed for carbon neutrality by 2030. Instead, its emissions have risen 48% since 2019.

Authored by Terence Greene via The Mises Institute,

On the 11th of June, Rishi Sunak’s Conservative Party stunned the United Kingdom by officially declaring in their 2024 election manifesto that, if reelected on July 4th, it would pass legislation to reintroduce “mandatory national service” to Britain. Despite the Orwellian nomenclature, the plan called for conscription, plain and simple. More specifically, it called for all British people — both male and female — upon turning 18 to either serve for one year in the armed forces or complete 25 days of “community service” for an unstated number of years.

The reaction to this announcement was swift and sharp, with pundits voicing equal parts horror and confusion at the announcement. Why on earth would the Conservative Party — a party already set to lose the election — adopt such a policy? Firstly, it is peacetime. Secondly, only two days prior to the announcement, the Conservatives’ own defense minister asserted that the U.K.’s modern military needs demanded a volunteer force, and that conscription would undermine the morale of the armed forces. Yet, these objections presume that the Conservatives’ decision to reintroduce conscription was made for defense purposes. This, however, is a naïve and overgenerous presumption. In fact, this seemingly incomprehensible policy position was a strictly economic exigency.

It is no secret that the British economy has seen better days. Once the most prosperous country in the world, the United Kingdom today is but a shadow of its former self. A nation which surged to riches untold upon the mighty wings of liberalism, limited government, and laissez-faire capitalism now plummets toward bankruptcy, weighed down by an inefficient welfare state that has grown almost nonstop for 80 years in absolute terms, and has never been more economically burdensome. Said welfare state was implemented by the British Labor Party from 1945-51 and has been assented to by the British Conservative Party ever since, which — in the venerable tradition of its ideological leading light, Benjamin Disraeli — has time and again declined to challenge the key assumptions underpinning the welfare state, preferring instead to concede its fundamental virtue in the name of electoral expedience. While the Labor Party employs the rhetoric of egalitarianism to justify the expansion of the welfare state (always its expansion), the Conservative Party employs the language of paternalism, noblesse oblige and so-called one-nation Toryism to justify their refusal to ever seriously wrestle with the yawning black void nestled in the very heart of the British government’s finances.

As the ill-fated Prime Minister Liz Truss and Chancellor of the Exchequer Kwasi Kwarteng were to discover in 2022, there is no “growing” out of this disaster. Cutting taxes and pausing new additions to the welfare state is not enough, as this still requires massive loans to fill the fiscal breach. The U.K. has been relying on debt to kick the welfare-crisis can down the road for decades now, and following the enormous deficits of the covid years, British promises to pay no longer ring true (as evinced by the run on the pound following the September 2022 minibudget). Only two credible options remain to the British government: hike taxes and aggravate the brain drain, flat growth, and low rates of private investment already afflicting the country, or cut benefits and face certain death at the polls.

As this goes on, the local governments of the United Kingdom are folding like cheap suits, having been comically ill-managed for decades and now no longer having access to bailout funds from the central government as there are no longer any funds to be had, bailout or otherwise. For instance, the city of Birmingham, after having spent untold sums on causes as deserving as a giant mechanical bull statue (meant as an attraction for the 2022 Commonwealth Games they hosted, despite being warned they couldn’t afford to do so) and “inspirational” street names has, in its desperate need to plug a £600,000,000 financial hole, resorted to turning off streetlights and collecting rubbish only once per fortnight.

In the face of all this, what is a Conservative, one-nation Tory to do? Why, implement conscription, of course! Why is that the natural policy choice, then? Austrian economist Ludwig von Mises makes it clear, writing on pages 197-98 of “Nation, State, and Economy”:

“The first way [of covering war’s cost] was confiscating the material goods needed for waging war and drafting the personal services needed for waging war without compensation or for inadequate compensation. This method seemed the simplest. … That the soldier received only a trifling compensation for his services in relation to the wages of free labor … has rightly been called a striking fact.”

While Mises was writing in the context of conscription employed for the purposes of armed struggle, Mises nonetheless clearly explains why conscription is an attractive policy tool — owing to its simplicity — for governments in need of labor but without the capacity to pay. By way of conscription, governments can compel the provision of labor at rates of its choosing; rates which will, for obvious reasons, be well below the rate at which a noncoerced individual would provide said service of their own free will. To the self-satisfied and socialist minds of the British Conservative Party, then, conscription is in fact the natural solution to the real-time breakdown of British finances and service-provision. By employing conscription, the fact that it cannot find the money needed to pay garbagemen is a nonissue, as the youth can be coerced into doing the same job for far less than a garbageman. Or, if they’d prefer, they can always just join the military and pay what Mises insightfully called the “blood tax.” Thank goodness for options!

Of course, like all socialist measures, conscription necessarily wreaks complete economic havoc. Wages and salaries in a free market are the reflection of the value placed on certain services, those values being themselves reflective of the intensity of the satisfaction the provision of those services produces in the minds of those who demand them. Cities like Birmingham can’t afford to pay garbagemen because it does not enjoy a free market. Rather, it suffers under a hugely inefficient socialist economy which confiscates the money which would otherwise go to paying people to collect garbage at a rate commensurate with the value placed on such services and the hesitancy of people to take up that work. The fundamental problem is this: Birmingham’s politicians value boondoggles like the Commonwealth Games more than garbage collection, and while the people of Birmingham take the inverse view, they send their money to Birmingham’s politicians. Thus, Birmingham’s politicians get to buy what brings them satisfaction, and the people of Birmingham increasingly do not. Conscription, rather than ameliorating this state of affairs, can, in the long run, only aggravate it as Britain’s politicians — now commanding legions of unpaid youth — will (either due to corruption or incompetence) divert those young people’s efforts to activity which brings them satisfaction, not the British public. The result of this will be an even more broken economy, now not only poor but maddened, as millions of people are torn from their own lives, and the pursuit of their own dreams, to go trim the hedges of key Tory donors’ country estates.

The British people — having rejected Sunak’s conscription plan by sweeping Labor to a landslide victory this July — perhaps believe that they have wisely spared themselves from the draconian policy of a truly insane party. Not so. Rather, the Conservative Party is undoubtedly the saner of the two major parties. Labor thinks that by doubling down on the welfare state, Britain may be saved. However, the Conservatives know better. They know that there is no saving Britain, at least not in its current socialist form. Thus, after Labor has done its dash, injecting yet another virulent strain of deficit spending into the ailing veins of the British economy, and it’s the Conservatives’ turn once more to win a meaningless landslide victory, they will likely return to the policy of conscription. Yet this time, against a backdrop of crisis-level welfare dependency, budget-busting interest payments, recession, and piles upon piles of rubbish accumulating uncollected across each and every British city and township, ripening horridly in the hot summer sun, the country shall not look and see an out-of-touch party, oh no. They shall look and behold a party which was merely ahead of its time.

Former British Prime Minister Margaret Thatcher once remarked, “The problem with socialism is that you eventually run out of other people’s money.” Well, it seems that “eventually” has finally come around, and all that is left to the party of Thatcher, of Winston Churchill, of Disraeli, and of Robert Peele, is the enslavement of its own people to serve as rubbish collectors and street sweepers. It seems inconceivable that 264 years after the Industrial Revolution first began in Britain, it today looks to the corvée system as the cutting edge of public policy. Yet, such is the measure of Britain’s fiscal woe. Such is the peril of socialism.

Authored by Tristan Greene via CoinTelegraph.com,

Scientists and lawmakers in the United States, United Kingdom and European Union are ramping up efforts to advance quantum computing in the West after scientists in China observed what appears to be the world’s first room-temperature time crystals.

A team of physicists hailing primarily from Tsinghua University in China, with contributions from scientists in Denmark and Austria, published peer-reviewed research on July 2 detailing the creation and observation of room-temperature time crystals.

In the month since the paper was published, quantum research labs in the West have announced numerous initiatives to extend existing efforts in the field of quantum computing and to create new research partnerships.

Room-temperature time crystals

Time crystals are a unique state of matter originally proposed by physicist Frank Wilczek in 2012. They work similarly to other crystals, such as snowflakes or diamonds, which are created when specific molecules form lattice-like bonds that repeat through space.

In time crystals, however, the molecules bond in time. Instead of locking into a crystalline structure that repeats, a time crystal’s molecules flicker back and forth between different configurations like a GIF on a loop. 

Back in 2021, an international team of scientists working with Google’s quantum computing lab simulated time crystals using a quantum computer. This breakthrough demonstrated the potential for quantum computers to explore exotic states of matter and set the stage for the convergence of quantum tech and time crystals.

Now, in July 2024, the Tsinghua team appears to have created time crystals at room temperature. This, theoretically, allows time crystal technology to be employed in non-laboratory equipment and could serve as a massive accelerator for the development of useful quantum computers.

Quantum computing

The realization of room temperature time crystals could solve one of the biggest problems in the field: figuring out how to create stable qubits (sort of the quantum version of classical computer bits) that don’t require massive amounts of power and infrastructure to form and maintain.

While perhaps not directly related to the China team’s work, labs and governments around the world — especially in the US, UK and Europe — have signaled renewed interest in quantum computing since the room-temperature time crystals paper was published.

In the US, new initiatives have taken place at the national and state levels, with federal defense department think tank DARPA and the state of Illinois both recently agreeing to commit $140 million each to the development of a new quantum computing center in Chicago.

Across the pond, on July 31, the UK government announced plans to invest approximately $127 million dollars in the development of five quantum computing research hubs to be led by Oxford University.

On the same day, the Massachusetts Institute of Technology announced a multimillion-dollar partnership with the University of Copenhagen to share research and co-develop quantum computing solutions.

Global energy consumption has significant regional variations due to differences in industrialization levels, climate conditions, population density, and access to natural resources, as well as varying energy policies and economic activities across countries.

For instance, countries with colder climates may consume more energy for heating, while highly industrialized nations may have higher per capita energy usage due to their extensive manufacturing sectors.

This chart below, via Visual Capitalist’s Kayla Zhu, shows the top 15 countries by energy consumption per capita in 2023, as well as the consumption per capita for each global region.

The figures are represented in gigajoules (GJ) per capita and come from the Energy Institute’s Statistical Review of World Energy 2024 report.

Qatar and Iceland Consume Most Energy Per Capita

Qatar had the highest per capita energy consumption worldwide in 2023 at 817 GJ per person. Almost all of the country’s energy consumption is derived from natural gas, of which the country has abundant reserves.

Countries located in hot or cold climates that are also rich in a particular energy resource, such as Qatar and its natural gas or Iceland and its geothermal energy, made up many of the top per capita energy consumers in 2023.

These countries tend to consume more energy to heat or cool homes and often use more energy since electricity costs are often on the lower end. Along with this, many of the top energy consuming countries per capita have fairly low populations, with Canada and Saudi Arabia being the only nations in the top 10 with populations of more than 10 million.

A Regional Perspective

Looking at global regions, North America unsurprisingly consumes the most energy per person, at 240 GJ per capita, almost three times the global average of 77 GJ.

North America’s numbers are in contrast to regions like Africa, that consumes 14 GJ per capita, or even South and Central America at 58 GJ per capita.

According to the Energy Institute, around 750 million people worldwide, or 1 out of every 10 people do not have access to electricity.