Data-dependent central banking, China's nuclear power surge, project gnome & Ukraine's middle-aged army.
Great links, reading and images from Chartbook Newsletter by Adam Tooze
Huang Rui 黃銳 Yuanmingyuan: Rebirth 圓明園 : 新生 1979
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Central banks and the new reality of data dependence
The great bet on rate cuts — and it was enormous — is dead. At the start of 2024, the expectation was for six, maybe seven, US rate cuts this year. That felt silly even then, but it is unravelling in humbling fashion. Today markets are pencilling in one, maybe two. … How did everyone manage to get so carried away with the notion that rates were poised for an aggressive chop? The main reason is that we are trapped in old ways of thinking, convinced inflation will fall back to something that feels like a norm and that central banks will hurry to retreat to the warm waters of the low interest rates that dominated the post-crisis era until after war and pestilence arrived. The reality is clearly more complicated than that. … The reality is that this is what data dependency — the policymakers’ mantra — really looks like. Rate setters are less able to spoon-feed investors granular guidance on what will happen next, because they are as easily pushed around by economic data as the rest of us. They may never again achieve their mission to be boring in our lifetimes. As long as deglobalisation, the green transition and heavier fiscal spending on the likes of defence persist, inflation will swing around and provoke abrupt changes of heart. We all have to learn to live with flip-flopping narratives and markets.
Katie Martin, FT
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Core services inflation is causing much of the worry in the United States, but it is very narrowly based:
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China’s investment in nuclear power construction has well-night tripled since 2019
In 2023 China had 10 nuclear reactor units either approved or starting new construction, which was the highest on record. These approvals have accelerated after 2018 with the implementation of third-generation nuclear reactor technology. China approved four new units in 2019, four again in 2020 and five in 2021. Prior to 2019, there were three years when China didn’t approve any. Nuclear power development in the country had stalled after the Fukushima nuclear accident in Japan in 2011. Currently, nuclear power projects under construction in China predominantly use the domestically developed Hualong One pressurized water reactor technology. This third-generation nuclear power technology costs 18 billion yuan to 20 billion yuan per unit. At the end of 2023, China had 26 nuclear power units under construction nationwide, amounting 30.3 gigawatts of installed capacity, according to the report. China has the capacity to build 40 reactor units at the same time, Zhang Tingke, secretary-general of the China Nuclear Energy Association, said at the forum. Third-generation nuclear power technology has fully entered the mass production stage, with 13 Hualong One units under construction around the world. China has 55 commercial nuclear reactors in operation at the end of 2023 with a total installed capacity of 57 gigawatts. That puts the country in third place globally behind the United States and France.
Source: Caixin Global
Huang Rui, Preparation for Democracy Wall
Huang Rui was born in Beijing in 1952. During the Cultural Revolution, he was sent at the age of 16 to Inner Mongolia where he worked as a farmer. He later returned to Beijing, working in a leather company until 1979. There, he studied art briefly at Beijing Worker's Cultural Center. Huang Rui was a founding member of the Chinese avant-garde art group The Stars Art Group which included artists Wang Keping, Ai Weiwei, Mao Lizi, Ma Desheng and Li Shuang and was active in from 1979 to 1983. This groundbreaking group of amateur artists was the first publicly active art collective to protest government censorship after the Cultural Revolution. The group made headlines in 1979 when, under the direction of Huang Rui and Ma Desheng, they held an exhibition outside the China Arts Gallery (now the National Art Museum of China). On the third day of the exhibit, the police shut it down, stating that these activities "affect the normal life of the public and the social order." Before this, the majority of their exhibits were held secretly in private homes, where the artists would participate in lively debates about topics ranging from Western art trends to artistic freedom. In 1978, Huang Rui co-published the literary journal Today (今天), which was thought to be "one of the most radical publications in circulation after the Cultural Revolution." The journal, which was in circulation for three years, included both the poetry and prose of such writers as Bei Dao, Gu Cheng, Mang Ke, Shu Ting, and Yang Lian. … A major theme of Huang Rui's work is the use of language. He uses texts, often Chinese political slogans, in a playful manner; however, his implications are far from comical. One of his most powerful pieces is "Charmain Mao 10,000 RMB" where he uses 10,000 RMB worth of banknotes to spell out the political slogan "Mao Zhuxi Wan Sui" which translates to "10,000 years for Chairman Mao."
This work in effect links the politics of Mao with the economic efforts of Deng Xiaoping, and acknowledges the contradiction that lies in the use of Chairman Mao's image on money. While Mao used his image to push the Cultural Revolution, Deng Xiaoping used Mao's image to push his own economic revolution. Huang Rui also often plays with the relationship between English and Chinese words, most notably in his piece "Chai-na/China" where he relates the Chinese characters "chai" and "na" (which mean "destroy here") to images from the demolition that occurred in Beijing in preparation for the Olympics. This is a theme that Huang Rui has explored in many of his works, including performance pieces. Chinese history is riddled with this idea of "Chai-na/China," as each dynasty would begin with building and creating, only to be destroyed and rebuilt by the next dynasty. Most recently, Huang Rui has been considered the major vocal advocate of the 798 Art Zone in Beijing. He was instrumental in the establishment of the art district in 2002, and in efforts to protect the area from demolition in 2004 and 2005. In 2006, 798 became the first state recognized and protected art district in China.
Source: Wikipedia
Project gnome
Ukraine has a middle-aged military. Average age of frontline soldiers is 43. Draft started at 27 until lowered, recently, to 25. Demography explains why. The 1990s generations were very thin.
Myanmar's plastic nightmare
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The cloud under the sea
The world’s emails, TikToks, classified memos, bank transfers, satellite surveillance, and FaceTime calls travel on cables that are about as thin as a garden hose. There are about 800,000 miles of these skinny tubes crisscrossing the Earth’s oceans, representing nearly 600 different systems, according to the industry tracking organization TeleGeography. The cables are buried near shore, but for the vast majority of their length, they just sit amid the gray ooze and alien creatures of the ocean floor, the hair-thin strands of glass at their center glowing with lasers encoding the world’s data. If, hypothetically, all these cables were to simultaneously break, modern civilization would cease to function. The financial system would immediately freeze. Currency trading would stop; stock exchanges would close. … Fortunately, there is enough redundancy in the world’s cables to make it nearly impossible for a well-connected country to be cut off, but cable breaks do happen. On average, they happen every other day, about 200 times a year. The reason websites continue to load, bank transfers go through, and civilization persists is because of the thousand or so people living aboard 20-some ships stationed around the world, who race to fix each cable as soon as it breaks. … The industry responsible for this crucial work traces its origins back far beyond the internet, past even the telephone, to the early days of telegraphy. It’s invisible, underappreciated, analog. Few people set out to join the profession, mostly because few people know it exists. There are 77 cable ships in the world, according to data supplied by SubTel Forum, but most are focused on the more profitable work of laying new systems. Only 22 are designated for repair, and it’s an aging and eclectic fleet. Often, maintenance is their second act. Some, like Alcatel’s Ile de Molene, are converted tugs. Others, like Global Marine’s Wave Sentinel, were once ferries. Global Marine recently told Data Centre Dynamics that it’s trying to extend the life of its ships to 40 years, citing a lack of money. One out of 4 repair ships have already passed that milestone. The design life for bulk carriers and oil tankers, by contrast, is 20 years.
Josh Dzieza The Verge
Huang Rui, Yellow Girl in AD Board, 2007
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