Authored by Michael Maharrey via SchiffGold.com,

The Federal Reserve would like you to think that it is scientifically guiding the economy with carefully calculated monetary policy.

The truth is the Fed is making things up as it goes along.

As Mises Institute senior editor Ryan McMaken noted in a recent article, Federal Reserve Chairman Jerome Powell has admitted that the central bank doesn’t know what it will do in 2023. And if you look at the herky-jerky path we’ve been on the last few years, it should be clear it hasn’t had a clue the entire time.

As Peter Schiff put it in a recent podcast, the Fed is oblivious.

They still think that we have a robust economy. They still think that inflation can be brought under control and that everything is going to be fine… They are completely oblivious to the disaster that they have created in the same way that they were completely oblivious to the 2008 financial crisis even in the summer of 2008 when the crisis was just around the corner. They have no clue that what they’ve been looking at is just the mother of all bubbles.”

At the December FOMC meeting, the Fed slowed its roll slightly, hiking rates by 50 basis points. That pushed the federal funds rate to 4.5%. The last time rates were this high was in 2007.

While the pace of rate hikes appears to be slowing, Powell maintained a hawkish tone, saying, “My view and my colleagues’ view is that this will take some time. We have a long ways to go to get back to price stability.”

But McMaken raised a poignant question: what exactly does “a long way to go” mean? That is rather subjective. But we can get a sense of what the Fed is thinking by looking at its Summary of Economic Projections. McMaken sums it up.

Most members of the committee believe the target policy rate will peak at 5.5 percent or less in 2023 and then fall back below 5 percent by 2024. In other words, most on the FOMC believe only two more hikes of 50 basis points are going to be “needed”—at most—and the FOMC would then get back to cutting the target rate yet again by mid-2023.  So, while Powell’s tone was undoubtedly hawkish, the Committee gave many reasons to look for a return to Fed easing just a few months away.”

A lot of people in the mainstream aren’t buying what the Fed is selling. One economist told Bloomberg that “the market is not buying the Fed’s increasingly hawkish position that they are going to raise rates to a higher-than-expected level and keep them there.”

The market clearly thinks inflation is going to be on a much more desirable path than the Fed is anticipating.”

Market skepticism is based on the growing anticipation of a recession. Most people don’t believe the central bank will keep hiking as the economy tanks. This is a rational position given that the Fed has historically rushed in to prop up a sagging economy. Why should we expect anything different this time around?

Powell keeps pointing to a “strong” labor market to justify his view that a soft landing is still possible. Of course, when you dig more deeply into the data, it becomes clear that the labor market isn’t nearly as robust as advertised. The government job numbers simply don’t add up.

And as McMaken pointed out, employment is a lagging indicator.

But, there’s no reason to expect to see rising unemployment in the early phase of a Fed tightening cycle. History shows that rising unemployment tends to come months after the Fed ends its tightening and reverts to a loosening cycle. We can see this in the delays between peaking fed fund rates and peaking unemployment rates. For example, in the leadup to the recession in the early 1990s, the federal funds rate started going down again in June 1989. But unemployment did not peak until the summer of 1992. Similarly, the federal funds rate began to fall in late 2000, but unemployment in the dot-com bust did not peak until the summer of 2003.”

Despite his self-assured demeanor, Powell admitted that he doesn’t know whether the economy will dip into a recession or not.

I don’t think anyone knows whether we’re going to have a recession or not, and if we do, whether it’s going to be a deep one or not. It’s not knowable.”

This was a rather startling moment of honesty from a person who gets paid to make us think he’s got everything under control.

As McMaken put it, the Fed is actually winging it when it comes to what it will do next. And in fact, the Fed has been winging it all along.

In recent months, the FOMC has eliminated forward guidance as it has been forced to face the reality it was very wrong about ‘transitory’ inflation and the Fed’s ability to stop inflation before it started. The Fed had promised for months that it had a secret plan that would make everything turn out well. But nowadays, the Fed no longer even attempts to keep up the pretense that it has the situation well in hand. Thus, Wednesday’s press conference lacked all the cocksure pronouncements of there being no recession on the horizon, and how the Fed would guide everything to a favorable end. Powell instead was saying things like ‘I don’t know what we’ll do [at the next meeting]’ and ‘I don’t think anyone knows if we’re going to have a recession or not.’ He even said at one point ‘this is the best we can do.’”

If this is the best we can do – well – yikes!

Streaming giant Netflix plans to invest nearly a billion dollars in a state-of-the-art production facility at the former Fort Monmouth Army base on the Jersey Shore. 

Deadline Hollywood reported that the $848 million redevelopment project would be completed in two phases over the next several years. Netflix paid $55 million for the 289-acre site. 

New Jersey Gov. Phil Murphy said the “transformative investment will serve as a cornerstone in our efforts to create a thriving industry from whole cloth,” adding the production facility will create jobs and allow an “entirely new ecosystem” to develop. 

“We’re thrilled to continue and expand our significant investment in New Jersey and North America,” Netflix Co-CEO Ted Sarandos said. 

Sarandos added: “We believe a Netflix studio can boost the local and state economy with thousands of new jobs and billions in economic output.” 

The announcement was made Wednesday evening after the Fort Monmouth Economic Revitalization Authority voted to accept Netflix’s bid for the former base.

The 289-acre site of Netflix Studios Fort Monmouth studio would be one of the largest production facilities in the world and second to the company’s largest production hub in Albuquerque, New Mexico, which totals 300 acres. 

“The project comes at a time of pressure on big entertainment companies to rein in content spending,” Deadline Hollywood said.

After several quarters of dismal subscriber growth and falling share price, third-quarter subs and growth topped forecasts. 

Netflix shares are down 50% on the year. 

Another TV and film production studio will only mean Netflix will be cranking out even more content by the mid-point of the decade. Hopefully it’s all not ‘woke’. 

Authored by Debra Heine via AmGreatness.com,

On the first day of trial in Arizona gubernatorial candidate Kari Lake’s election challenge Wednesday, her lawyers focused on the Maricopa County election equipment failures that caused chaos on Election Day and disenfranchised voters. Superior Court Judge Peter Thompson previously dismissed eight out of the ten claims Lake made in her lawsuit. In his order allowing Lake’s case to go forward, Thompson said that she would have to prove that misconduct occurred, and that it resulted in “identifiable lost votes” affecting the outcome of the election.

Lake’s lawyers attempted to make that case with their bombshell revelation that a review of random ballots found that 48 out of 113 (42.5 percent) were “19-inch ballots produced on 20-inch paper,” causing them to be rejected.

Clay Parikh, a witness who examined the defective ballots on behalf of the Lake campaign, said someone must have changed the printer configurations.

“These are not a bump against the printer and the settings change,” he explained. “There are security configurations. I’ve reviewed the evidence, and the printers are configured via script, which by any large organization that has to do multiple systems is the standard.”

“It takes away the human error of somebody miscoding in the instructions on the printer,” Parikh said.

When asked whether it could not have happened by accident,  Parikh said “no.”

“is there anyway this could have happened by accident”…pertaining to the 19 inch ballot being casted as a 20 inch ballot.

“No sir, the system would not allow that”

The system takes away human error.

So it was intentional? pic.twitter.com/z2Xlmb82P1

— Slayed Wolf (@TheBerthaR) December 21, 2022

“This one-inch discrepancy caused chaos on Election day. Causing the mass rejection of these votes as they were attempted to be read through the tabulators,” Kari Lake’s campaign wrote on Twitter, Wednesday.

🚨

48 of 113 ballots reviewed during our examination were 19-inch ballots produced on 20-inch paper.

This one-inch discrepancy cause chaos on Election day. Causing the mass rejection of these votes as they were attempted to be read through the tabulators.

— Kari Lake War Room (@KariLakeWarRoom) December 21, 2022

In another tweet, Kari Lake’s War Room called the discrepancy “deliberate sabotage.”

“The machines should have been programmed for 19.” By Maricopa County’s own testimony, there is no such thing as an 20″ ballot,” Lake’s campaign team wrote. “Yet somehow machines in 61% of their polling centers still printed a 19″ inch ballot on a 20″ paper. Deliberate sabotage targeted at Republican turnout.”

The machines should have been programmed for 19″

By Maricopa County’s own testimony, there is no such thing as an 20″ ballot

Yet somehow machines in 61% of their polling centers still printed a 19″ inch ballot on a 20″ paper

Deliberate sabotage targeted at Republican turnout https://t.co/wIZBX32Coe

— Kari Lake War Room (@KariLakeWarRoom) December 22, 2022

Wednesday night, Lake herself suggested that the election was “sabotaged” with “mutant ballots.”

“They printed Mutant Ballots on Election day–using a 19″ image on a 20″ ballot paper,” she tweeted. “That’s why the tabulators rejected the ballots and that’s why chaos ensued as Lake supporters flooded Voting Center to cast ballots. Clowns & Crooks run our elections. #LakeTrial #Sabotage.”

They printed Mutant Ballots on Election day–using a 19″ image on a 20″ ballot paper. That’s why the tabulators rejected the ballots and that’s why chaos ensued as Lake supporters flooded Voting Center to cast ballots.
Clowns & Crooks run our elections. #LakeTrial #Sabotage https://t.co/LrSvh6gDQq

— Kari Lake (@KariLake) December 22, 2022

Roving attorney Mark Sonnenklar, who took the stand as a witness for Lake, disagreed with Maricopa County’s assessment that problems in 60 percent of election day voting centers were “a small matter.”

“It was really pandemonium out there everywhere!” Sonnenklar testified.

“It was really pandemonium out there everywhere!” – Mark Sonnenklar, RNC attorney testifies at @KariLake trial against Maricopa County elections. @RealAmVoice pic.twitter.com/XpfqyT3USC

— Ben Bergquam – Real America’s Voice (RAV-TV) News (@BenBergquam) December 21, 2022

When asked whether he had “personal knowledge” that the printing errors could have changed the outcome of the election, Sonnenklar replied, “had there not been tabulator issues at 132 vote centers, this election would have resulted—would have ended up with Kari Lake winning.”

Powerful testimony by RNC attorney, Mark Sonnenklar, “had there not been tabulator issues at 132 vote centers this election would have resulted, would have ended up, with @KariLake winning.”@RealAmVoice pic.twitter.com/JYJ1zaBy9p

— Ben Bergquam – Real America’s Voice (RAV-TV) News (@BenBergquam) December 21, 2022

Elections investigator Heather Honey testified that Maricopa County and its contractor Runbeck Election Services failed to follow the “legal requirements for chain of custody.”

Honey pointed to statements given to her by various individuals, including a Runbeck employee who alleged that county election workers didn’t include a key chain of custody document when delivering ballots from drop boxes on election night.

“She expressed her concern over the fact that the procedure that had been well established during the election had not been used for the large number of election day dropbox ballots that were received,” Honey said.

The investigator spoke with another woman who was an election observer at the Maricopa County Tabulation Election Center (MCTEC) on election night when the ballots came in from the dropboxes.

“Her concern,” Honey explained, “was that specifically the seals were being removed from the transport containers, and the ballots inside were not counted. That was a requirement, as she understood it, and the fact that they were just taking those ballots out of the transport containers without counting them was her primary concern.”

Honey went on to testify: “They weren’t following the legal requirements for chain of custody. There were seals on the containers when they transported them, but the specific issues were that they were just cutting them open, taking the ballots out, putting them in trays without regard to how many; there was no documentation.”

She said the county’s chain of custody problems made it impossible to determine how many votes were improperly counted in the system.

🚨 Chain of custody expert on BOTH Runbeck and Maricopa County: “They weren’t following the legal requirements for chain of custody” pic.twitter.com/0xtjcF7EVj

— Kari Lake (@KariLake) December 21, 2022

KARI LAKE TRIAL: Heather Honey, Investigator and Supply Chain Expert with 30+ years experience sends hack defense lawyer packing after she answers his loaded legal question in what appears to be an attempt to intimidate her pic.twitter.com/Ra5oiOExX9

— Drew Hernandez (@DrewHLive) December 21, 2022

Canadian lawyer Viva Frei gave Lake high marks for what she was able to achieve in court Wednesday. “Anybody who says today’s hearing is not an abject disaster for @katiehobbs is simply not watching the trial,” Frei tweeted. “Kari Lake is doing better than anyone could have possibly imagined, even with the limited scope of her claims before the court.”

Update (0953ET): Senate Majority Leader Chuck Schumer (D-NY) says the chamber has finally reached a deal to move the omnibus forward.

“It’s taken a while but it is worth it,” said Schumer, who says that while timing is unknown, he hopes to get a line of amendments through the voting process quickly. “We will vote on all of the amendments in order and then vote on final passage.”

WE HAVE A DEAL. Senate has a time agreement to get to the Omnibus. There is a line of amendments and Schumer is hoping to get through the votes quickly. Final timing still not 100%.

— Lisa Desjardins (@LisaDNews) December 22, 2022

Developing…

*  *  *

A Trump-era border policy that allows immigration officials to turn quickly expel migrants without processing during a public health crisis is currently holding up passage of the omnibus spending package.

The effort, led by Sen. Mike Lee (R-UT), would keep Title 42 in place – and would cut funding for the office of Department of Homeland Security chief Alejandro Mayorkas unless the Biden administration reinstates the border control policy.

“We have a difference of opinion on immigration policy. We’re not going to solve that in this budge,” said Sen. Chris Murphy (D-CT), chair of the Senate Appropriations Homeland Security Subcommittee, who took aim at Lee’s immigration efforts. “And to let that disagreement take down aid to Ukraine to keep people alive during a cold winter, especially tonight, is pretty unthinkable.”

Lee, meanwhile, told Fox News on Wednesday night “I insisted that we have at least one amendment, up-or-down vote, on whether to preserve Title 42. Because Title 42 is the one thing standing between us and utter chaos. We already have mostly chaos. This would bring us to utter chaos if it expires, which it’s about to.”

The effort to maintain Title 42 has scuttled hopes that lawmakers could vote on the omnibus overnight, however on Wednesday evening, Senate Minority Whip John Thune (D-SD) said he thought they might be able to move forward on Thursday morning.

“There’s been some progress made. … I wouldn’t say breakthrough yet,” he said.

The Biden administration has sought to end the practice since the spring, arguing that the pandemic health emergency it was based on has subsided (despite extending the emergency last month). A group of GOP-led states has sued the administration in federal court to block him from ending the policy.

Title 42 was ruled “arbitrary and capricious” by a district court judge, and ordered the Biden administration to end it on Wednesday, but Supreme Court Justice John Roberts halted that deadline on Monday after the court was asked to intervene. On Tuesday, the Biden administration asked the court to end the program, but, asked for an extension until at least Dec. 27 to allow immigration officials time to prepare for a wave of illegal immigrants at the southern border.

While border agents are already encountering thousands of immigrants every day, the number is expected to rapidly spike when the program ends. Notably, the Biden administration has already minimized the use of Title 42 – instead processing immigrants under Title 8, which allows officials to screen for asylum claims, the Washington Examiner notes. Title 8 also allows border officials to refer migrants for criminal prosecution for repeat illegal entries.

US officials have expelled around 2.5 million migrants under Title 42, nearly two million of which have been carried out by the Biden administration.

A Democratic Senate aide told Punchbowl News that Lee’s insistence on Title 42 is a “poison pill”. If Lee’s amendment passes, Democrats say the omnibus bill would be “dead on arrival” in the house, which votes after the Senate. Democrats are reportedly circulating a competing amendment on Title 42 aimed at attracting centrists, and dissuading them from voting on Lee’s amendment.

“We have a difference of opinion on immigration policy. We’re not going to solve that in this budget,” said Sen. Murphy. “And to let that disagreement take down aid to Ukraine to keep people alive during a cold winter, especially tonight, is pretty unthinkable.”

Talk about a guilt trip…

According to Senate Majority Leader Chuck Schumer (D-NY), the chamber will work until 2am on Thursday. “It is my expectation that we will be able to lock in an agreement on the omnibus later this morning. We are very close, but we’re not there yet,” he said, asking members to stay near the chambers to “minimize any delays.”

Authored by Charles Hugh Smith via OfTwoMinds blog,

The gag reflex kicks in at some point and we walk away because it is no longer worth the price.

Everyone has a line in the sand when it comes to inflated prices they refuse to pay. For one Walmart shopper I observed, it was a carton of eggs for close to $10. She announced her line in the sand verbally, with great force and sincerity.

What’s your line in the sand, the point at which you simply refuse to pay the asking price? Is it the $25 burger? Or is it the $50 for two burritos and two beverages?

Each person’s line in the sand reflects their income, wealth, budget, social status and value system–what’s important to them. For some higher income folks, it might be the ridiculous “resort fee” that’s tacked onto the already overpriced resort room, hotel tax, excise tax, parking fees and the extra-special charge for Internet service.

For others, it might be the outrageous estimate for repairing a system failure in a nearly-new vehicle that is (surprise!) no longer covered by the manufacturer’s warranty. Hundreds of dollars for what?

How about $25 for a few ounces of specialty coffee beans?

Or is it $38 a pound for chocolate-covered nuts or some other confection?

Is it being stripmined to buy a hot dog and beer at a sporting event, or the “service charge” to buy a grossly overpriced ticket to a concert?

Or is it having to take out a second mortgage to cover the entrance fees to an amusement park?

Maybe it’s the shockingly high cost of what used to be dirt-cheap–a camping permit in a state or national park. (When camping becomes an expensive outing, the Revolutionary Clock is getting close to midnight.)

Could it be the absurdly inflated cost of cable TV service, or the total cost of all those subscriptions for marginal content/entertainment spew?

Or perhaps you finally had enough of paying over $5 for a box of cereal that’s now so narrow and tall (to mask the shrinking contents) that the box doesn’t even stand up on its own? (You can make your own much healthier granola for a fraction of the cost of packaged mostly-air cereals.)

Or maybe it’s paying extra to get a seat reservation after you’ve already bought the airline ticket. (Interesting, isn’t it, that buying an airline ticket doesn’t necessarily mean you have a seat reservation–that’s extra.)

Perhaps it’s the rental car fee that not that long ago was $25 a day that’s now $100 a day.

How about $2,400 a month for an ugly little flat in a new cookie-cutter apartment complex?

The gag reflex kicks in at some point and we walk away because it is no longer worth the price. Since price is set on the margins of supply and demand, all these lines in the sand will eventually become consequential.

*  *  *

My new book is now available at a 10% discount ($8.95 ebook, $18 print): Self-Reliance in the 21st Century. Read the first chapter for free (PDF)

Become a $1/month patron of my work via patreon.com.

A better than expected GDP print was just the kind of good news that stock market bulls didn’t want to hear this morning as Appaloosa’s David Tepper told CNBC told the world he is “leaning short” because central banks around the world are tightening and traders should “not ignore what the central bankers are saying.”

“I would probably say I’m leaning short on the equity markets right now because the upside/downside doesn’t make sense to me when I have so many Central banks telling me what they are going to do, what they want to do, what they expect to do,”

“I’m gonna lean short. I’ll be short bonds,” says David Tepper. “I’m an optimist but I would lean short on the equity markets because so many Central banks are telling me what they’re going to do.” pic.twitter.com/SWU1cTrGcl

— Squawk Box (@SquawkCNBC) December 22, 2022

His message is clear – rates will remain higher for longer as global central banks fight inflation that proves stubborn (wages and labor supply) and the market is not pricing that in at all…

“The market is not buying the Fed’s increasingly hawkish position that they are going to raise rates to a higher-than-expected level and keep them there,” said Lindsey Piegza, chief economist at Stifel Nicolaus & Co, according to Bloomberg.

The Appaloosa founder pointed out the hypocrisy of traders ‘fight the fed’ now after a decade of following them sheep-like: “I believed the Fed before and I believe the Fed now.”

“We are going to have a lot more tightenings.”

“Sometimes they tell you what they are going to do and you have to believe them,” Tepper added.

Tepper went on to say that the “upside/downside doesn’t make sense to me.”

“Don’t ignore what these guys (Central bankers) are saying,” Tepper said.

“I don’t think they will let a deep recession happen in some sense. It doesn’t necessarily bare well for earnings and the outlook.”

“It’s going to be just difficult for things to go up right now because of these banks and because what they are saying,” Tepper added.

Yields spiked on the ‘good’ GDP print…

All of which sent stocks tumbling…

Lots of people are passing around the following chart of the exploding put/call ratio suggesting everyone’s hedge so have no fear…

But, as SpotGamma warns, many regard this as a signal that traders are bracing for worlds end, but we can say with upmost confidence that this is not fear-based demand (which likely does not come as a surprise to SpotGamma readers). This put activity is being driven by an “operational” trade.

Finally, back to Tepper: as a reminder, in 2020 he appeared on CNBC and exclaimed that QE would pump markets…

“I love riding a horse that’s running,” Tepper told CNBC’s Joe Kernen in an exclusive email.

“We have been long and continue that way.”

…he was right then… and now that tide is going the other way, and he is riding that wave back out.

Let’s hope he is not ‘that’ right!

After the US economy plum

bed a technical recession in the first half on the back of a trade and inventory drag in Q1 and Q2 respectively, which pushed GDP negative in H1 but which was never recognized by the NBER, moments ago the BEA reported its final estimate of Q3 GDP which came in even hotter than previously expected, rising at a 3.240% rate, above the 2.930% estimated one month ago and well above the 2.57% initial estimate reported in October, mostly on the back of another upward revision in personal consumption.

The update from the “second” estimate reflected upward revisions to consumer spending, which rose 2.3% in Q3 up from 1.7% in the previous estimate and up from 2.0% in Q2, as well as upward revisions to business investment, and state and local government that were partly offset by downward revisions to inventory investment and exports.

Here is the breakdown:

• Personal consumption contributed 1.54% to the 3.240% GDP bottom line, up from 1.18% in the 2nd estimate and up from 0.97% in the 1st Q3 GDP estimate
• Fixed investment subtracted 0.62% in Q3, a smaller reduction than the -0.74% in the second estimate
• The change in private inventories however took off a bigger chunk, subtracting -1.19% from the final Q3 GDP, up from -0.97% previously.
• Net trade added 2.86% to the bottom-line GDP print (1.65% to exports, 1.19% imports), slightly below the 2.93% in the second estimate.
• Finally, government consumption added 0.65% to the bottom line print, up from 0.53% seen in last month’s revision.

Looking at the bigger picture, the third-quarter increase in real GDP reflected increases in exports, consumer spending, business investment, and government spending that were partly offset by decreases in housing investment and inventory investment. Imports, which are a subtraction in the calculation of GDP, decreased.

• The increase in exports reflected both goods (led by industrial supplies and materials, “other” goods, and nonautomotive capital goods) and services (led by “other” business services and travel
• The increase in consumer spending reflected an increase in services (led by health care and “other” services) that was partly offset by a decrease in goods (led by motor vehicles and parts as well as food and beverages).  
• The increase in business investment reflected increases in equipment and intellectual property products that were partly offset by a decrease in structures.   
• The increase in government spending reflected increases in state and local as well as federal (both defense and nondefense spending).  
• The decrease in housing investment was led by new single-family housing construction and brokers’ commissions.  
• The decrease in private inventory investment was led by retail trade (mainly clothing and accessory stores, other general merchandise stores, and “other” retailers). 
• The decrease in imports reflected a decrease in goods (led by consumer goods) and services (led by transport)

Strong GDP also meant higher inflation, and the GDP price index was revised up from 4.3% to 4.4% in Q3 (also higher than the 4.3% estimate), if below the 9.0% prior quarter. Core PCE Q/Q rose 4.7% in 3Q, also higher than the 4.6% in the previous estimate and 4.6% consensus estimate for the final print.

Today’s release includes estimates of GDP by industry, or value added—a measure of an industry’s contribution to GDP. Private services-producing industries increased 4.9 percent, government increased 0.6 percent, and private goods-producing industries decreased 1.3 percent. Overall, 16 of 22 industry groups contributed to the third-quarter increase in real GDP.

• The increase in private services-producing industries primarily reflected increases in information (led by data processing, internet publishing, and other information services); professional, scientific, and technical services; and real estate and rental and leasing (led by real estate). Partly offsetting these increases were decreases in utilities as well as finance and insurance (led by Federal Reserve banks, credit intermediation, and related activities).  
• The increase in government reflected an increase in state and local government that was partly offset by a decrease in federal government.  
• The decrease in private goods-producing industries primarily reflected a decrease in construction that was partly offset by an increase in mining

Russia has blasted Ukrainian President Zelensky’s Wednesday visit to Washington and appearance before Congress, calling it a “Hollywood-style trip” that’s meant keep the fires of “proxy war” against Russia burning. 

“The Hollywood-style trip to Washington by the head of the Kiev regime has confirmed that the administration’s conciliatory statements about the lack of intention to start a confrontation with Russia are just empty words,” Russian ambassador to the US, Anatoly Antonov, said in fresh statements.

“What was essentially announced to applause and sarcastic smirks, was the need to continue the ‘proxy war’ against our country. Until a complete victory over us,” he added. 

During Zelensky’s some 30-minute long speech before Congress, which was frequently interrupted by spontaneous standing rounds of applause from US lawmakers, the Ukrainian leader vowed “absolute victory” to be accomplished “with” the United States – in provocative words given while VP Kamala Harris and outgoing House Speaker Nancy Pelosi were just over his shoulder. 

Antonov further blasted the “manic idea of defeating the Russians on the battlefield” in reacting to the speech, also condemning Biden’s newly announced pledge to send Patriot missiles. The Russian ambassador warned that any crew, even if directly from the US or NATO, found manning the Patriot batteries and systems becomes a fair target on the battlefield. 

He additionally claimed that throughout the conflict Moscow has tried to “appeal to common sense at all levels,” but blamed the West for upping its supply of longer range missiles and more advanced arms which is leading to escalation and thus future consequences “impossible to even imagine.”

But Zelensky’s address to Congress and “the American people”, which marked a very rare opportunity for a foreign leader, was peppered throughout with phrases like “Only victory!” Near the end of the address he also quoted from Franklin D. Roosevelt’s famous “Day of Infamy” speech.

“The American people in their righteous might will win through to absolute victory,” Zelensky said while quoting FDR, and he followed by pledging that Ukraine too will achieve “absolute victory.” 

Caught up w/ the Ukrainian diaspora delegation on their way into the Capitol to cheer for Zelensky
They told me $45 billion wasn’t enough, neo-Nazis do not exist in Ukraine and the banning of the Russian wing of the Orthodox Church & oppo parties was justified bc “martial law” pic.twitter.com/pFE2wmWaH9

— Max Blumenthal (@MaxBlumenthal) December 22, 2022

As Zelensky arrived in Washington Wednesday, the Kremlin had signaled the trip to the US and meeting with Biden at the White House now means there’s no chance of peace with Kiev.

“The supply of weapons continues and the range of supplied weapons is expanding. All of this, of course, leads to an aggravation of the conflict. This does not bode well for Ukraine,” Kremlin spokesman Dmitry Peskov had said.

Authored by Rystad Energy via OilPrice.com,

• Europe’s renewable energy industry is booming.

• If Europe is to remain a leader in renewable energy, the region will have to invest more into its grid.

• Grid bottlenecks could derail Europe’s green energy boom. 

Europe’s energy transition ambitions face several challenges, but a major impediment to bringing new renewable power online is insufficient grid capacity. Rystad Energy’s current base case forecast has Europe adding as much as 530 gigawatts (GW) of solar PV and onshore and offshore wind between 2022 and 2030, more than 66 GW per year on average. Furthermore, the share of solar and wind combined as a share of total installed capacity surpassed 10% in 2010 and more than tripled in 2021, reaching 34%, according to Rystad Energy research.

Growth is not expected to slow down anytime soon, as European countries are planning huge additions of renewables over the next few years. If Europe is to remain a leader in the energy transition, a huge amount of grid capacity will need to be developed, both to integrate new generation capacity into respective countries’ power mixes and to better connect European countries so that electricity can flow in the most optimal way.

The staggering amount of new solar and wind capacity expected to come online in Europe in the coming years means that grid interconnectivity will be the bottleneck to both the more efficient use of energy sources as well as overall slower decarbonization of the power sector as more fossil fuels need to be used to compensate. Historically, this has been much less of an issue as Europe’s power system has been dominated by four large sources – coal, gas, nuclear and hydropower – all with varying degrees of dispatchability but none considered intermittent.

With the pace of renewable energy development substantially exceeding the speed of grid upgrades and expansion projects in parts of Europe, policymakers and the power sector will need to carefully examine if a country’s development plans for new generation capacity match its development plans for both internal and cross-border transmission capacity. The timelines for new projects are very long and some countries in Europe are already curtailing renewable power that could be used elsewhere – for instance, Germany curtailed about 10.2 terawatt-hours (TWh) of wind power in 2017, the highest of any European country to date. The yearly average is around 5% of variable renewable energy curtailed, highlighting how bottlenecks are already an issue.

“Europe’s increasingly connected power grid is one of the first globally to take on substantial amounts of renewable and intermittent power. Moving power around the continent to minimize the use of carbon-emitting fuels will only be possible if the grid is upgraded. This will not be simple, quick, or cheap, but it will reduce greenhouse gas emissions and increase energy security. The race is now on to see if grid upgrades can match the staggering levels of new renewables set to come online in the next decade,” says Fabian Rønningen, senior analyst, power markets at Rystad Energy.

Europe’s grid will need to connect northern winds and southern sunshine

The existing capacity base and future capacity will be spread unequally between European countries, with the likes of the North Sea emerging as another European energy hub with hundreds of GW of capacity planned to come online in the coming decades. For a future energy system, in which Europe’s energy sources are utilized optimally, both policymakers and industry will have to think differently about grid development, compared to the status quo. Most of the new capacity that will come online in Europe in the coming decades will be solar and wind, with such resources varying significantly across the continent. Southern parts of Europe have better solar conditions than the north, while wind resources are highest in the northern and eastern regions of the continent, as well as all coastal and offshore areas. This means that Europe’s future energy system could have a much higher degree of electricity flows between countries than we see today, despite Europe already being considered well interconnected.

Case study: Spain  

Spain has emerged as one of the European leaders when it comes to both solar and wind development, and currently has one of the largest renewables pipelines in Europe. Spain has the most economic solar potential of the large European countries due to its sizeable landmass and high yearly solar irradiation, while it has also been a pioneer in the European wind industry. Furthermore, due to its relatively weak coupling to the rest of continental Europe, Spain provides an excellent example of how internal European grid bottlenecks could hamper Europe’s energy transition.

Although grid development within Spain is expected to grow rapidly over the coming decade, only three high-voltage interconnectors to France are currently planned, two of which are not expected to come online before 2027. This is just one example of potential bottlenecks Europe could face over the next decade, as hundreds of GW of solar and wind power come online, while the development of supporting grid infrastructure lags, especially cross-border interconnections. Policymakers need to ascertain whether grid development plans are in line with ambitious renewable energy targets to ensure transmission capacity does not constrain the energy transition.

Installed capacity from renewable energy sources in Spain will more than double by 2030 in Rystad Energy’s current base case forecast. While installed capacity from non-renewable energy sources will drop from 54 GW in 2022 to 34 GW by 2030, capacity from renewable energy sources will grow from 64 GW to 151 GW. Solar will drive most of the growth in renewables, primarily driven by developments in central Spain. Expansion plans for transformer capacity are set to keep up with these ambitious growth targets in installed capacity. Spain’s transmission system operator (TSO), Red Electrica, has mapped out detailed plans for upgrades and expansions to its transmission network. Towards the end of this decade, these plans could see transformer capacity grow by more than 220% compared to 2022 levels. Although these upgrades to the network are planned across Spain, most capacity looks set to be added in southern and central Spain, particularly in communities such as Andalucia and Castilla y Leon (Figure 4). These are also the regions where most of the planned solar and wind capacity will come online in the next few years.

The last time a high-voltage interconnector between Spain and France went operational was in 2015. In subsequent years, the countries acknowledged the mutual benefits of further integrating their power grids by projecting three other high-voltage direct current connectors across their shared border. One of the projects is a 400-kilometer link that will run between the Cubnezais substation (near Bordeaux, France) and the Gatika substation (near Bilbao, Spain), known as the Bay of Biscay project. The interconnector will mainly be laid subsea in the Atlantic Ocean with the rest buried underground, and will be the first submarine interconnector between Spain and France. The project has total transmission capacity of 2 GW and will lift total interconnection capacity between the two countries to 5 GW. The project is currently expected to be completed by 2027. Additionally, the countries are investing in reinforcements to existing interconnectors.

When it comes to the use of France-Spain interconnectors, power has mainly flowed into Spain. Spain has been a substantial net importer of French electricity every year since 2016, with 12.4 TWh of net yearly imports at peak in 2017. This year will show a significant change with Spain a net exporter to France every month in 2022 except for February, amid a large shortfall in French nuclear generation. From 2016 to 2022, Spain was a large net importer of cheap French nuclear power, while in 2022 Spain had the flexibility to increase mainly gas-fired power generation to support French consumers amid the energy crisis. This further highlights the benefits of increased interconnectivity for both countries. Furthermore, Spain is currently one of the largest generators of renewable power in Europe and has an impressive pipeline of renewable energy projects, while a substantial proportion of electricity exported to France so far in 2022 has been solar and wind.

Unlike Spain, France has not planned to increase the share of renewable energy sources in its power mix to the same extent. The situation with nuclear power in France is expected to improve in 2023, which will also benefit Spain. With more interconnectors between France and Spain, the two can rely on each other during periods when their power production is low. Given the abundant renewable energy power that will be produced in Spain, France will then be able to import clean, renewable energy when the sun shines and the wind blows. On the other hand, Spain will be able to import stable and dispatchable energy from France’s nuclear reactors to fill the intermittency gaps when the weather is less favorable. In other words, expanding high-voltage connections between the two power grids will benefit both countries and the wider European region.

This begs the question: is enough interconnector capacity being developed in Spain and France compared to the pace of renewable installations? The timelines of the interconnector projects are very long, as shown by the Bay of Biscay project, which is expected to take 10 years from initial consultations started in 2017 until it is expected online in 2027. As an illustration, 5 GW of transmission capacity will be able to interchange roughly 40 TWh per year if used at very high utilization factors – a substantial amount, but relatively small compared to total power demand in both countries. Both countries’ power demand is also expected to increase rapidly after 2025, as the electrification of their economies continues. Furthermore, the Spain-France example is just one of many. Many of the same questions will arise in other parts of Europe, especially as the North Sea is emerging as another European energy hub with hundreds of gigawatts of capacity planned to come online in the coming decades. Therefore, both policymakers and the power sector should carefully examine if a country’s development plans for new generation capacity match with its development plans for both internal and cross-border transmission capacity. The timelines for new projects are very long and Europe simply cannot afford grid bottlenecks halting its energy transition plans.