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A threat to the US economy biggest: experts name unexpected factor

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a threat to the u s economy are important

The conflict between China and Taiwan is a threat to the U.S. economy largest and can deal a blow to the U.S. economy due to the U.S. dependence on the main supplier of microchips on the island and the high rate of development of semiconductor manufacturers in China, experts say.

Washington’s current policy on the island carries significant risks if the situation develops into an armed conflict, and affects semiconductor production in Taiwan, supplied to the American market. The island’s high-tech products are used in many U.S. goods, including computers, automobiles, medical equipment, artificial intelligence software, and communications equipment.

A threat to the U.S. economy is important. The U.S. lost $240 billion last year due to a shortage of microchips, and possible military action in Taiwan could hit the U.S. economy even harder because of its reliance on supplies from Taiwan Semiconductor Manufacturing Company (TSMC), the world’s largest.

U.S. President Joe Biden’s administration in the 2021 review of the supply chain has already recognized the country’s significant dependence on TSMC products, and, according to research group Capital Economics, it is TSMC that produces more than 90% of the most advanced microchips in the world.

Major US technology corporations, including Apple, Intel, Nvidia, Qualcomm, AMD and Broadcom, buy microchips from TSMC, while the US government depends on Taiwanese microchips to produce some of its most important and sophisticated systems, including weapons.

Representatives of Taiwan`s authorities also pointed to threats related to a possible escalation of the situation around the island. For example, Taiwan’s official representative to France, Francois Chin-Chun Wu, said on BFM Business that escalating tensions in the Taiwan Strait could lead to complications in the global semiconductor market.

In July, Zach Nunn, former director of cybersecurity at the White House National Security Council, called the shortage of semiconductors and the lack of capacity for their production a “direct threat” to the U.S. economy and national security.

In addition to military action, the threat to the production and additional exports of microchips from Taiwan is a high dependence of the island on raw materials from China. In response to a visit to Taiwan by U.S. House Speaker Nancy Pelosi, Beijing has taken steps to curb the supply to the island of silica sand, which is used in developing semiconductors.

Earlier we reported that U.S. Congress agrees to allocate $430 billion for climate and inflation.

Economy

Current inflation in Argentina could reach a record 100% by the end of the year

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why is inflation in argentina so high

Current inflation in Argentina reached 82.2% in September, the highest since the Great Depression, and may reach 100% by the end of the year. 

Why is inflation in Argentina so high?

According to the publication, inflation in the country by the end of 2022 could reach 100%, several times higher than in other Latin American countries. Experts estimate that during the 33 months of President Fernandez’s cabinet, prices in the country rose by 243.6 percent.

“The government of Argentine President Alberto Fernández has once again rebuked entrepreneurs for chasing excessive profits in a situation where the country’s inflation – the worst since the Great Depression 30 years ago – was 82.2 percent this year by the end of September, according to independent economists,” the publication noted.

According to the famous Argentine sociologist Augustine Salvia, after the elections and the organization of public works in the summer the economy went into a recession, as more and more people began to work without an employment contract. At the same time, the situation at the end of the fourth quarter could be even worse.

Earlier, we reported that OPEC+ extended the deal until 2024 and reduced the oil production quota by 2 million bpd.



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The U.S. will not sell strategic reserve oil after the end of Biden’s executive order

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strategic reserve oil

The U.S. administration is not considering an option for strategic reserve oil after the departure of President Joe Biden’s executive order. This was stated by White House press secretary Karin Jean-Pierre at a briefing.

“We’re not considering a new sale of strategic reserve oil beyond the one you’re talking about. I have nothing more to say, we’re not going to consider new sales,” Jean-Pierre said.

According to her, the U.S. will continue to fight inflation. However, no action will be taken now with the strategic reserves. Because this could lower oil reserve levels.

In late March, Biden signed an executive order that required the U.S. Energy Department to sell 1 million barrels of oil a day for six months from the strategic reserve for the sake of reducing gasoline prices in the country.

On Oct. 1, U.S. Energy Secretary Jennifer Granholm asked U.S. energy companies to lower fuel prices and rebuild their reserves.

Before that, global oil prices on September 28 began to decline by more than 1% in the morning amid information about a sharp increase in fuel stocks in the United States.

Earlier we reported that French enterprises were obliged to determine their own measures to save energy.

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OPEC+ extended the deal until 2024 and reduced OPEC+ oil production quota by 2 million bpd

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is opec+ cutting oil production

The OPEC+ alliance has agreed to extend the deal on oil production volumes until December 31, 2023. The daily OPEC+ oil production quota for the member countries of the commodity association will be reduced by 2 million barrels, according to a press release from the organization.

“Participating countries have decided to extend the declaration of cooperation until December 31, 2023 and to adjust total production downward by 2 million bpd from the required production levels in August 2022,” the statement said.

The reduction in daily production levels of oil will begin in November 2022. The alliance also stressed the importance of sticking to the new terms of the deal for each member of the cartel.

Is OPEC+ cutting oil production?

The new requirements were conditioned by the state of general uncertainty in the world energy market as well as the risks of a recession in the global economy in the light of international sanctions against one of the leaders in oil exports, Russia.

On October 5, the EUobserver reported that the eighth package of the EU’s anti-Russian sanctions will take effect on the sixth of this month. The list of restrictions will include: the introduction of price caps on oil transported by sea, as well as measures against exports of steel and timber industries. The total damage is estimated at up to €7 billion.

Earlier we reported that China earns hundreds of millions of dollars from reselling LNG from the US to European companies.

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