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Gazprom Delighted By China Announcement Nat Gas Need To Soar By 150% In 6 Years

Tyler Durden's picture


It may comes as a surprise to many, if certainly not the country known as Gazpromia, that according to a government statement released on Wednesday, China will raise its natural gas supply to a whopping 420 ­billion cubic meters per year by 2020 on soaring demand due to urbanization, a government statement said on Wednesday. This compares roughly 168 bcm in gas used in 2013, which means somehow China hopes to boost gas production by over 150% in just 6 years.

The increased supply will ­cater to the rising demand for natural gas in people's daily lives, schools, nursing homes, home heating, as well as in buses and taxis, according to a statement published on the central government's website.

According to Global Times, the supply increase is also driven by the nation's efforts to mitigate air pollution stemming from an over-reliance on coal, the statement said. Sounds familiar - only problem is that the same narrative, used in the US time and time again, has achieved virtually nothing in fixing said over-reliance on coal.

Global Times adds that tTo expand natural gas production, investment in gas storage facilities as well as their construction and operation will be open to all market players, the statement said.

And the best news for gas E&Ps: companies will also have the option to issue bonds to raise capital for the construction of storage facilities. The government will offer favorable land policies for ­sto­rage facility projects, the statement said.

China's total consumption of natural gas rose 13.9 percent year-on-year to 167.6 billion cubic meters in 2013, according to a report published on January 15 by the Economic and Technology Research Institute of the China National Petroleum Corp.


The higher consumption led to a 25 percent increase in imports, totaling 53 billion cubic meters last year, 31.6 percent of the total consumption.


Supplies will continue to be tight this year, the report said, predicting that the natural gas consumption would expand 11 percent this year to 186 cubic meters.

And the well-known punchline to Zero Hedge readers: China and Russia aim to wrap up a 10-year series of talks about Russian gas supplies before Russian President Vladimir Putin visits China in May, Reuters reported on April 14.

Which is also the key: Russia knows very well that when it comes to organic growth, China will be woefully unprepared to boost its own production nearly threefold in just over five years. Which is where Gazprom and Putin's holy grail deal come in. Because while Russia is happy to sit on the sidelines as China pretends its own producers can strike gold, or in this case gas, it knows they won't. And it will be more than happy to provide all the gas shortfall China has - in the process joining China in the hip in a symbiotic relationship that solidifies the most important post-New Normal concept we first dubbed the Gas-O-Yuan.


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Thu, 04/24/2014 - 11:35 | 4690791 IridiumRebel
IridiumRebel's picture

China playing both sides. Sun Tsu anyone?

Thu, 04/24/2014 - 11:37 | 4690805 Kirk2NCC1701
Kirk2NCC1701's picture

LOL.  China plays only ONE side:  China's side.  Have done so for thousands of years.

Hedge accordingly.

Thu, 04/24/2014 - 11:40 | 4690814 BLOTTO
BLOTTO's picture

'China will raise its natural gas supply to a whopping 420 ­billion cubic meters per year by 2020'...


Hmmm, i wonder what country they are going to 'raise' it from? eh?


Come get it. Lock n' Load

Thu, 04/24/2014 - 11:43 | 4690823 hungarianboy
hungarianboy's picture

Eastern Ukrainians enraged by the Kiev military operation have used an RT video report to tell first-hand details of a Ukrainian army attack in Slavyansk. The Ukrainian troops raided a checkpoint and took all the food and medicine, they said.

Thu, 04/24/2014 - 12:00 | 4690913 Winston of Oceania
Winston of Oceania's picture

Why would you have food and medicine at a checkpoint that no longer exists?

Thu, 04/24/2014 - 12:07 | 4690937 MeMadMax
MeMadMax's picture

Better than Coal I guess....



Thu, 04/24/2014 - 12:19 | 4690993 Seer
Seer's picture

Because the "unplugging incubators" line no longer works?

Thu, 04/24/2014 - 11:45 | 4690832 BaBaBouy
BaBaBouy's picture

Our Planet Is Doomed... Humanity Has To STOP Reproducing At Such Fucking Insane Rate...

Thu, 04/24/2014 - 11:52 | 4690857 BLOTTO
BLOTTO's picture

Picking the pineapple and anchovies off the pizza is useless when the dough is rotten to the core.


We need to 'sever the beasts head'....not 100,000,000 masses. Otherwise, we havent done FUCK all. The beast doesnt care if its in control of 1,000 people or 1,000,000,000.


Thu, 04/24/2014 - 14:12 | 4691614 BaBaBouy
BaBaBouy's picture

MAybe Everyone Can Have An Acre Of Land On The Planet...

Are You Raedy To Farm???

Do You Want Yours In The Sahara, India, Or The Arctic???

Yep, Everyone Can Have An Acre Of Land.

PS... I Just Heard Much Of JAPAN's Rice Is Contaminated, Heavy Metals Cadmium In The Fields...
Food Production Is Headed Up Shits-Creek... Good Luck With All The Newbies.

Thu, 04/24/2014 - 16:09 | 4692264 macholatte
macholatte's picture


No worries. I just heard Monsanto has a genetically modified strain of rice that's resistant to nuclear radiation & heavy metal music, votes Progressive several times at every election and always watches American Idol.


Thu, 04/24/2014 - 11:54 | 4690882 Smegley Wanxalot
Smegley Wanxalot's picture

... and BaBaBouy will be first in line to stop fucking!

Thu, 04/24/2014 - 12:02 | 4690917 UselessEater
UselessEater's picture

celibacy for all but TPTB will fix earth... or TPTB just stop fucking with every nation on every continent and its farmers will feed us well on the existing cleared land whilst our population follows a natural decline in the rate of growth

the myth of over population:

Truth is every man, woman, & child in the whole world could have about 1 acres of land to themselves & it would all fit into a land mass the size of North America, with the rest of the world completely unoccupied.

Thu, 04/24/2014 - 12:17 | 4690983 Flakmeister
Flakmeister's picture

And if all they did was farm that acre, we might be fine...

In reality, there is about 0.25 ha of arable land per capita, that corresponds to about 1/2 acre...

Lets see you support yourself off of that...

Take your bullshit sophistries elsewhere...


Thu, 04/24/2014 - 12:32 | 4691048 UselessEater
UselessEater's picture

if you and Gates, His Royal Virus and Gore etc could just go the way you want the rest of us to go and just do it quickly and quietly that would free up half the planet already


I have continents to roam


Thu, 04/24/2014 - 12:41 | 4691074 Volkodav
Volkodav's picture

I think is possible.


Thu, 04/24/2014 - 12:41 | 4691078 UselessEater
UselessEater's picture

dipshit its an illustration of the land available on the planet vs population

now fuck off malthusian Monsanto git

stop following me like a stalker

someone else on ZH must want you

Thu, 04/24/2014 - 13:29 | 4691312 Flakmeister
Flakmeister's picture

Quit saying stupid shit and you have a deal....

Thu, 04/24/2014 - 13:58 | 4691530 Element
Element's picture

When it can't win, which is very often, it always and invariably resorts to smear.


Thu, 04/24/2014 - 12:59 | 4691158 rubiconsolutions
rubiconsolutions's picture

"Truth is every man, woman, & child in the whole world could have about 1 acres of land to themselves & it would all fit into a land mass the size of North America, with the rest of the world completely unoccupied."

Truth is a very small segment, say around 1% would soon find a way to reduce that one acre to one square meter by creating debt based money and enticing the people to mortgage their futures and their children's futures. Then they would seize the unoccupied land by force and plunder the resources until.....

...Oh wait, isn't that what has already happened? Nice try though. Now please check back into Disneyland and hop on "It's A Small World".

Thu, 04/24/2014 - 13:04 | 4691175 Bunders
Bunders's picture

"Our Planet Is Doomed... Humanity Has To STOP Reproducing At Such Fucking Insane Rate..."

Or come up with a better plan for the provision of food, shelter, energy, education and opportunity to however many billions of people earth ends up with. What population number is sustainable and how to get the population of the world to agree to target it? Assuming it results in a mind boggling queue of people waiting for their societally sanctioned opportunity to reproduce, how to manage that queue? Would people end up pairing up on the basis of their position in the queue rather than any other consideration?

If you ran an opinion poll today giving people the choice of global war killing billions and the system continuing as it has so far untill the next global war again e.t.c. or the above queue to breed scenario which would they choose? If you are POTUS and you know that Americans generally prefer the scorched earth recurring scenario but the rest of the world favours the queue to breed scenario then what? Act in the name of democracy in your own country and nuke the world or say democracy be damned and aim for maximum population?

Thu, 04/24/2014 - 11:52 | 4690871 Smegley Wanxalot
Smegley Wanxalot's picture

They will get it by attaching environmentally friendly UN-approved fartpacks to cows to capture the natural gasses and store them for future green purposes.

Who needs fracking when you can harness cowfarts?

Thu, 04/24/2014 - 12:13 | 4690963 UselessEater
UselessEater's picture

these cow farts?

Published on Dec 3, 2012 At COP 18 in Doha, Qatar, CFACT asked the delegates to the UN Climate Change Conference if they would be willing to wear a carbon capture mask that filters out the carbon dioxide (CO2) they exhale. You'd be surprised how many agreed to this ridiculous proposal.

Thu, 04/24/2014 - 14:01 | 4691568 Element
Element's picture

Actually, I wouldn't be surprised at all.

Thu, 04/24/2014 - 11:41 | 4690819 Diet Coke and F...
Diet Coke and Floozies's picture

Who do I trust? Me! That's who!

Thu, 04/24/2014 - 12:16 | 4690973 Dewey Cheatum Howe
Dewey Cheatum Howe's picture

Yep Chinese are more like 5 or 6 faced. Vice has always been the Chinese biggest weakness though...

Thu, 04/24/2014 - 11:36 | 4690795 RougeUnderwriter
RougeUnderwriter's picture

I'm sure they will be happy when the UKee's blow up the pipelines leading into Europe from Russia

Thu, 04/24/2014 - 15:24 | 4692065 sessinpo
sessinpo's picture

RougeUnderwriter       I'm sure they will be happy when the UKee's blow up the pipelines leading into Europe from Russia


That would be shooting oneself in the foot or cuting the nose of despite the face. Good thinking.

Thu, 04/24/2014 - 11:37 | 4690800 youngman
youngman's picture

China and Russia think alike...they are buddies..they both do not like the West...and they both want more control of the world...

Thu, 04/24/2014 - 11:52 | 4690870 UselessEater
UselessEater's picture

correct and it should be noted


Thu, 04/24/2014 - 11:53 | 4690873 buzzsaw99
buzzsaw99's picture

imo they aren't buddies and don't trust or even like each other and never have. what they do have in common is hatred of the overbearing officious pompous over-reaching imperial retarded usa ptb.

Thu, 04/24/2014 - 14:09 | 4691590 Element
Element's picture

Exactly, the Chinese and Russian strategic partnership has always been about strategic opportunism, and always subject to review. No one in their right mind would trust China and no one paying attention would trust Putin. The common factor is the US is not only profoundly dishonest and untrustworthy, it is also frighteningly stupid and prone to both severe under-reaction, for which they then over-compensate with considerable over-reaction interspersed with copious circus behavior (clowns, then lots of clowns, then way too many clowns, etc).

Thu, 04/24/2014 - 11:54 | 4690880 Flakmeister
Flakmeister's picture

In reality there are natural enemies with a long history of mutual distrust...

Thu, 04/24/2014 - 11:58 | 4690900 Winston of Oceania
Winston of Oceania's picture

China has claims to a great deal of Russian held territory, they just don't talk about it, for now...

Thu, 04/24/2014 - 14:34 | 4691790 CrabNuggetOne
CrabNuggetOne's picture

I'm sure it's nearer the truth to say that they want you lot in the U.S of Murder to have less influence i.e. fuck off and leave the rest of us in peace!

"..they both don't like the west..", awe diddums, don't the other kids like you? Grow up you juvenile RETARD.

Thu, 04/24/2014 - 11:37 | 4690803 Hongcha
Hongcha's picture

Long and strong.

Thu, 04/24/2014 - 11:38 | 4690806 spekulatn
spekulatn's picture

Green arrow for the picture RougeUnderwriter.

Thu, 04/24/2014 - 11:40 | 4690817 Kirk2NCC1701
Kirk2NCC1701's picture

They'd do more to "stir the pot", if they announced what currency they'll be using.

E.g. "Gas and oil deal to be settled in local currency, not USD".  Or is that TMI (too much info) for our MSM?

Thu, 04/24/2014 - 11:48 | 4690847 ParkAveFlasher
ParkAveFlasher's picture

OK - so China demand growth based on rapid urbanization, right, got it, sure. 

Thu, 04/24/2014 - 12:17 | 4690980 Seer
Seer's picture

Actually, this may just be for heating those empty ghost cities: can't leave them w/o heat/AC lest they start molding...

Thu, 04/24/2014 - 12:53 | 4691121 ParkAveFlasher
ParkAveFlasher's picture

Imagine being that one janitor, in the whole city, responsible for keeping the heat on in all those buildings. 

Thu, 04/24/2014 - 15:19 | 4692041 Seer
Seer's picture

And then going home and seeing everyone around you shiver...  Maybe best to not tell others where your source of revenue comes from!

Thu, 04/24/2014 - 11:50 | 4690854 Smegley Wanxalot
Smegley Wanxalot's picture

Obama to announce sactions against China for crossing a red line in 5.. 4.. 3.. 2,928,428,099.. 2,928,428,098.. 2,928,428,097....

Thu, 04/24/2014 - 11:52 | 4690872 Itchy and Scratchy
Itchy and Scratchy's picture

And Vlad's not takin' USD's!

Thu, 04/24/2014 - 11:56 | 4690895 Winston of Oceania
Winston of Oceania's picture

What will he take?

Thu, 04/24/2014 - 15:28 | 4692077 sessinpo
sessinpo's picture

Winston of Oceania         What will he take?


What won't he take? And better yet, why does it matter. Trade one corrupt government for another. The previous government only broke your left leg. The new government will save your left leg but will break your right leg. Congrats.

Thu, 04/24/2014 - 11:53 | 4690876 Hongcha
Hongcha's picture

Sold my USLV on the pop, as I do not believe this is going to escalate and if PMs are going up based on solely on the drumbeats of Woar, they are doomed to a new low because we are not going to get it.

Thu, 04/24/2014 - 11:55 | 4690885 Flakmeister
Flakmeister's picture

Gazprom better start building those pipelines soon then....

Thu, 04/24/2014 - 12:08 | 4690938 Seer
Seer's picture

But won't Gazprom worry about China's abiotic oil? </sarc>

This is a perfect of how the strategy of perpetual growth on a finite planet leads to mental decay.  It's like, well, um, we'll worry about where the energy is to come from later, we've got to BUILD, BUILD, BUILD now! and, technology is sure to save us, but pulling all that oil from the middle of the earth, which, as you know, is all that's really inside the earth (the oil companies are all holding out on us), OK, That and Unicorns and Skittles! (and some chewy caramel)

And for the big trick watch them try and pull some measly 3% growth after they've hit their 150% ramp.  Does anyone understand math (exponential function) anymore?

Fri, 04/25/2014 - 00:02 | 4693874 Dr. Destructo
Dr. Destructo's picture

You don't need math to understand that the use of fossil fuels have allowed people to expand beyond the capacity of their local environment, and can only be sustained as long as the fossil fuels keep a burnin'. Take away the fossil fuels and you'll see a massive decline in the population since goods and services can no longer be transported over vast distances quickly. Say goodbye to industrial farming (shitty concept anyway) and green tech, and say hello to our ancestrial roots before the industrial revolution came about. Maybe when all this shit happens the assholes in the produce aisle will finally know what a horseradish looks like without going on the interbutts to find out.


Thu, 04/24/2014 - 12:11 | 4690948 Rising Sun
Rising Sun's picture

Fucking communists bloviating again. 


Putin is broke and China has choked its cash flow.


So buy  MOAR SHIT China - print to meet the obligation - no one gives a fuck, except, maybe, your vendors.


The US will play - here's a government cerified screwdriver, for the low low price of $100,000.  How many would you like?

Thu, 04/24/2014 - 12:15 | 4690969 Seer
Seer's picture

Desperation just escalates as the tricks to make "growth" appear become more and more convoluted.

"The US will play - here's a government cerified screwdriver, for the low low price of $100,000.  How many would you like?"

Is there even a company in the US making screwdrivers?

Thu, 04/24/2014 - 12:22 | 4691009 Dewey Cheatum Howe
Dewey Cheatum Howe's picture

People seem to forget as 3D printing manufacturing becomes cheaper and cheaper it will need raw materials also. You can make raw material plastic for manufacturing purposes from methane and ethane not just crude oil.

Fri, 04/25/2014 - 00:04 | 4693888 Dr. Destructo
Dr. Destructo's picture

And the energy required to run the machine comes from?

Thu, 04/24/2014 - 12:27 | 4691028 gcjohns1971
gcjohns1971's picture

This announcement appears good for Russia only if you dont understand how far Russia gas deposits are from China.


This announcement IS VERY GOOD FOR Kasakhstan. 

Russia - Gaspromia, as the article says - will have a lot of difficulty competing over price while maintaining 8,000 miles of pipeline int he worlds worst terrain just to get the product to market.

Thu, 04/24/2014 - 12:34 | 4691052 Flakmeister
Flakmeister's picture


The major Russian gas fields are closer to Svarlbard than they are to Beijing....

Thu, 04/24/2014 - 13:19 | 4691201 falak pema
falak pema's picture

Isn't it Putin's ambition to build a network between Iran/Turkomen/Kazhak towards India/China the two big markets, based on GAS supplies?

I thought that was a major Putin Asian "common market" objective; which requires roll back of Us presence in that region.

If the Iran/Iraq region solidifies that gives Iran a huge increase of fossil potential both liquid and gas.


Thu, 04/24/2014 - 13:35 | 4691361 Flakmeister
Flakmeister's picture

It could well be that...

Sounds like Russia will then be taking another kick at the Afghanistan can....

Thu, 04/24/2014 - 12:49 | 4691102 foxenburg
foxenburg's picture

@gcj. Yes, good for the khazaks. It made me look at a map and for the first time i noticed the little 30km corridor of Russian frontier between Kazakhstan and Mongolia. Now, that didn't happen by accident.

Thu, 04/24/2014 - 12:41 | 4691077 Flakmeister
Flakmeister's picture

From down-under....

Solar PV is now cheaper than Asian LNG imports on a BTU basis....

Thu, 04/24/2014 - 12:57 | 4691145 Seer
Seer's picture

“For these (developing Asian economies) solar is just cheap, clean, convenient, reliable energy. And since it is a technology, it will get even cheaper over time,”


Increase volume, economies of scale help kick in for lower production costs, decrease in available natural resource inputs.  At some fucking point this equation starts backpedaling: refer to Jevons Paradox  The statement, therefore, is ilogical.

I wish that prices would drop before I put my order in for a solar-powered electric fence set up.

Thu, 04/24/2014 - 13:32 | 4691333 Flakmeister
Flakmeister's picture

Cheaper relative to fossil fuels would be a fairer statement...

There are cornucopian twits in the eco-camp as well (but we all knew that already)....

Thu, 04/24/2014 - 15:32 | 4692100 Seer
Seer's picture

"Cheaper relative to fossil fuels would be a fairer statement..."


I'm afraid, however, when the gap really looks to close that solar gets punched down again.  I think that the oil infrastructure will be able to feed on itself for a while in order to spread the margins up enough to stay on top.  The US has the infrastructure, and it has the raw inputs (though, as can happen to any finite resouce, they will decrease in abundance).  I think that Gail Tverberg has the right call, that tech can only fall right alongside depleting fossil fuels.  Again, it's rather tough to switch to solar or add it in when you're broke and stuck with an existing, dying infrastructure.  It's questionable whether having had an early start on it all would have saved us (if growth was still the objective then the answer would be "no"); too late now...

(BTW - I didn't down arrow you)

Thu, 04/24/2014 - 15:46 | 4692175 Flakmeister
Flakmeister's picture

This is where we differ....

Given that the USD will be toast, run up the debt another trillion but instead invest it in real infrastructure...

It is that or go out whimpering into the cold dark night...

Thu, 04/24/2014 - 16:33 | 4692366 Seer
Seer's picture

I understand what your reasoning is here, but there's continuing maintenance costs: it's highly unlikely that old systems can be completely phased out, if even significantly so.  If all can be manufactured and maintained from local resources then fine (though "for how long?" is still a question).

"It is that or go out whimpering into the cold dark night..."

That's how it ends.  So, why do we enslave future generations to an unsustainable paradigm in order that we continue to rape their future?

I'd had countless discussions with people as to why it didn't make sense to "invest" in "light rail."  My predictions of reduced employment is appearing.  What good is it to have "light rail" to commute to a nearby city when you don't have a job?  Now folks get to pay for transportation costs for a handful of people to ride in comfort to serve the corporate machine (the "light rail" was a subsidiy to those businesses).  This is one instance in which I promoted a "solution"- take most of the proposed transportation funds and push them back to local businesses hiring locals: support local entities while reducing traffic loads- WIN WIN!

It's a nice boat and all... but like I said, we missed it.

Thu, 04/24/2014 - 13:03 | 4691119 falak pema
falak pema's picture

Long term planning of Russia aims towards more balancing towards Asia, for Putin regime.

Its the sign of the times.

The Columbus cycle comes to an end. We don't say anymore "Go west young man, we say : go east to Hongkong or Shanghai.

And Putin understands that. Its back to the Mongol domination-- I'm being tongue in cheek in my analogy-- and Putin is prepared to be Alexander Nevsky, who won the war with the Teutonic West, but stayed a vassal of the Golden Horde.

I think the logic of long term is there for Putin; balancing Gazprom towards East after having started the ball moving with current, rich West--but for how much longer?--- keeping his options open for 2020 +, eastwards.

In the meantime, Putin is taking the lead in the SHORT TERM to roll back Pax Americana and create some political "lebensraum" for himself by saying to the US NEO CONS : I dare you!

If the Saud alliance crumbles, if the Iran situation rumbles, if the US loses the petrodollar hegemony; the move to Asia will rumble faster for Russia.

Tipping times; this goes beyond just a question of "Cold War" balancing act, this is from Putin's perspective a strategic geo political change.

If the West, and I MEAN THE WHOLE WEST, wants back into the strategic game LONG TERM it BETTER MOVE FAST AWAY from the Fossil Energy paradigm, which is the CAUSE as of 1970, of its current dystopian momentum. We have got into debt financed economy because of Oil Imports.

Finding a New paradigm around renewables---as ENERGY is even MORE Important to ensure growth than even the MONEY LINE-- is the ONLY VIABLE solution to making the Columbus legacy something that will continue to fashion the world of tomorrow; aka the West does not go into a long term tail-spin trying to protect a crumbling power structure built around a FALSE PARADIGM---Shades of Constantinople 1453---(we are not far away from that type of situation in the EU today in Greece).

Its time to wake up from the current dystopian "Our way of life is not negotiable", aka the Bush-Saud alliance around fossils, suicidal and hubristic meme. Its the death knell of our civilization for decades if we don't adjust PRONTO.

We should be thanking Putin for ringing the alarm bells!

Thu, 04/24/2014 - 12:58 | 4691154 22winmag
22winmag's picture

Money in the bank.

Thu, 04/24/2014 - 13:01 | 4691157 Seer
Seer's picture

"by saying to the US NEO CONS : I dare you!"

More like: "Get off my lawn!"

"Its time to wake up from the current dystopian "Our way of life is not negotiable", aka the Bush-Saud alliance around fossils, suicidial and hubristic meme. Its the death knell of our civilization for decades if we don't adjust PRONTO."

There is no "adjustment."  The premise is faulty!  "Sustainable" anything with the word "growth" added is a contradiction/self-cancelling statement/proclaimation.

It's not just energy.  Food, Shelter and Water.

Thu, 04/24/2014 - 13:15 | 4691212 falak pema
falak pema's picture

You should differentiate between those who feel they are part of the "fast track" of humanity and those who are expendable.

Thats how ALL empires reason : West as East.

So from THEIR perspective their growth horizons for their own family, aka the 20% of humanity is what counts; aka 2-3 billion upper echelon people on Earth.

I don't think they worry much about the others.

And, rest assured the resources of the world will be at the disposal of the 20%; exclusively. Whatever that means in terms of famine for others.

Thu, 04/24/2014 - 15:40 | 4692143 Seer
Seer's picture

I'm pretty good about spotting all the nuances, thank you very much.

"And, rest assured the resources of the world will be at the disposal of the 20%; exclusively. Whatever that means in terms of famine for others."

But, you're stating this as FACT, with a LOT of assumptions.  I agree that this might be what "they" are thinking, but we're not going to see some tuned-down tech-world.  Economies of scale.  Just like the USPS cannot operate without all that junk mail, most of the infrastruture that you assume is going to be for the "20%" REQUIRES volume to operate otherwise it jiust plain doesn't work.  Feedstock.  Economies of scale are highly leveraged in being able to command huge allocations/shipments of feedstock.  Further figure that the top 20% cannot exist without some sort of lower-class, in which case the total number (20%) needs to be increased, or perhaps the top-class needs to be reduced (which would tend to place further downward pressures on production volumes).

To be fair, and to acknowledge that you ARE likely correct, it's pretty much already as you say it is NOW.  There's a report/study out that does an economic breakdown for the entire globe, identifying wealth levels of the various "classes."  I'm in the top 10%: and by most I'm not wealthy.

Thu, 04/24/2014 - 20:17 | 4693203 earleflorida
earleflorida's picture

I'm going to throw out some history dating back to 1904-05, regarding the 'Russo-Japanese War' and later... during which Japan ironically formed an alliance with Germany with post-WWI forgotten? Funny stuff happens in global wars!


Note: Japan fought against the Nationalist Chinese, and not against the Communist. Manchuria was China's Industrial Center by 1931, controlled by Japan's 'Kanto Army' who ran the South Manchurian Railway Company, while Shanghai still remained China's Commercial Center. The Russian, Japanese, and Chinese railroads controlled all commerse in northern China. Unbelievable wealth was being made by all parties! This is why Japan invaded China during the regional wars of 1931-36. It was all about commerce and trade as it is today, with issues between the two never truly having been resolved. Russia played both sides until they signed the Truman Declaration amassing 1.5 million troops on the Manchurian border in August ( Aug/9/1945-- 2nd A-bomb dropped on Nagasaki?) of 1945. Coincidential!!! 

This will help explain the excerpts (quotes pgs. 9-11) 'The Wars For Asia: 1911- 49' by S.C.M. Paine c.2012

"The tale told here is one of nested wars set off by fears and ambitions against a backdrop of lethal national dilemmas. The choices made by nat'l`ist leaders reflected not only the ambitions for empire of Japan, China, and Russia, but also deep fears and dilemmas with no obvious solutions. After WWI shattered the int'l political order and the 'Great Deression' then shatteredthe global economic order, the Western democracies bloodied themselves on the shards, discrediting liberal democracy and liberal economies in the process. In retrospect the belated post-WWII turn toward expansionist economic policies seems obvious, but it was not so at the time. Economic and political recovery required the massive stimulus of war spending to get America back to work and the postwar Marshall Plan to restore Western Europe. Back in the 1090s,fascism and communism appeared to offer more promising solutions to the depression than did the wornout paradigm offered by the stagnant Western democracies.                   Both fascism and communism appealed to important segments of Chinese and Japanese society. The Nationalists attempted to create a hybrid out of communist political institutions and fascist economic institutions, while the Communist preferred the authentic dish of unadulterated communism. Fears and ambitions animated both the Communists and the Nationalists, who dreamed of a reunified Qing empire and the restoration of China as the greatest power in Asia, if not the world. Meanwhile, the Japanese feared the expansion of the Soviet influence in Asia, and the Western protectionist response to the Great Depression."

cont.  Quotes next page... 


Thu, 04/24/2014 - 21:52 | 4693448 earleflorida
earleflorida's picture

cont: Quotes

"Their fears and ambitions for empire met in Manchuria. Fears and ambitions also drove the Russians, who envisioned their country in the vanguard of a new Int'l Order replacing the discredited liberal democratic status quo. Yet everywhere the Chinese, the Japanese, and the Russians faced danger, hostile neighbors, and internal foes. Meanwhile, the Americans dreamed away the 1920s, ignoring the need to contain Germany and the many interconnections of the global economy. Desparation did not reach American shores until the stock market crash in 1929. Soon desparate decisions around the globe reflected the desparate times.                            In the 1930s, China, Japan, Russia, and the U.S. all tried to go their separate ways. But the long civil war fed into a regional war war that escalated into a global war, demonstrating the inescapable connections of living on a shared planet. Eventually, the separate ways converged into a global war, which determined the outcome of the regional war, and the outcome of the global and regional wars then strongly influenced that of the long Chinese cival war-- a war whose ramifications preoccupy policy makers still.                             The butchery of the fighting defies description. One quesstimate puts the number of Chinese dead during the two-generation long Chinese cival war at more than 20 million. The sheer breadth of these wars has shaped the current Asian balance of power as well as national perspectives on the requirements for national security and the appropriate treatment of neighbors. At the beginning of the third millennium, the rubble left by a half-century of unrelenting warfare in China preoccupies the current generation of Asian leaders. Whereas WWII is history in the West, it remains embedded in current events in the East and an unsurmounted barrier between China and Japan.                                                             Adding and connecting the missing links not included in the conventional tale shed light on the critical events that have helped make the Chinese and Japanese who they are today. The missing connections, which primarily concern non-Western protagonists, are necessary to understand current Asian relations, whose fulcrum is not bilateral U.S. relations with any one power, but remain the nexus of Chinese, Japanese, and Russian relations that the conventional tale skips. The tale told here begins with three protagonists: Japan, China, and Russia."     end quoted excerpts

Note:    Korea was controlled by the Japanese. All Korean politicians and leaders resided in Shanghai under the protection of the Japanese. In 1952 Japan formally renounced all territorial rights to the Republic of Taiwan (ROC/ Formosa) at the San Francisco Peace Treaty (newly formed United Nations & Security Council)

Note2:  Russian Premier Malenkov shared by President Khrushchev from 3/6/53- 3/8/55 (dual leadership after Stalins death?). Stalin dies of a cerebral hemorrhage and Premier Malenkov calls for a peace treaty with the United States ~4 months later. No peace treaty was ever signed between the North and South Korean's, only that of a demarcation being the 38th parallel. (just like Afghanistan and Pakistan? British!)

 thankyou Tyler

Ps. this data will be of interest shortly


Fri, 04/25/2014 - 14:27 | 4693867 earleflorida
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