Belgium is more clever than Germany and extends the running time of its nuclear reatcors by at leats ten years.



And they did not even ask Brussels for permission. How dare they! :yeah:


Now, from a European perspective, the two reactors are disputed since long, and reasons for concern due to age and security of theirs. One wonders why "we Europeans" did not switch these off, and left the far better and safer German reactors on...?!


Without saiyn it, the German giovenrment obviousy internally has surrendered to the need for getting power supplies for france in the futrure, which means Germany once again makes itsel fdep3ending. France may not thgreaten us with invasions, but it wanst a very< diferent potlicval course inEurope, a strong socialist central state with planned economy and French hegemony - and germany shouold pay for it and for the debts of the others. With being dependent on them, Germany will find it harder and harder to resist to French ambitions.



But we hold up the precious illusions of moral superiority and a clean green conscience!! :yeah:

FOCUS writes:


This year could see the highest inflation in Germany since the Second World War. And that's not all: economists are already coming up with worst-case scenarios. Demonetization could also be accompanied by a slump in the economy - stagflation. Researchers believe that two factors in particular are essential for this.

According to Eurostat, our money is currently being devalued by 7.5 percent. And it could get worse in the course of the year. The Corona aid measures, the recovering economy after the pandemic and the high energy prices will ensure inflation in the euro area in 2022 that has not been seen since the oil crisis in the 1970s.

But the end of the banner days may not have arrived. Christian Sewing, CEO of Deutsche Bank and head of the banking association, said last week that inflation "could temporarily reach double digits this year" if the German government decides to impose energy embargoes on Russia.

There would then be a high probability, the bank president said, "that the German and probably also the European economy would fall into recession with long-term consequences." So further devaluation of
money and savings and a rise in unemployment.

Economists such as Professor Niklas Potrafke of the Ifo Institute now see the European Central Bank as having a duty: "The ECB should raise the key interest rate as quickly as possible. This is urgently needed to keep inflation in check." Economists see interest rate hikes as the most important step to contain the inflated money supply. But the ECB remains in Mediterranean tranquility. The Federal Reserve Bank in the U.S., the Fed, is also struggling to get off the ground when it comes to raising interest rates. It is too tempting for many countries to continue borrowing cheaply at low interest rates.

How serious is the situation now? And what factors could now lead to stagflation - in other words, a collapse of the economy accompanied by strong currency devaluation? And don't government aid packages, which are well-intentioned but also pump even more money into the economic cycle, have the opposite effect?

Markus Demary, senior economist at the Institut der deutschen Wirtschaft (IW) in Cologne, Germany, looks across the Atlantic with concern: "In the U.S. in particular, spending policies have an inflationary effect, as they seek to increase demand through consumer vouchers, for example. In Europe, government spending during the pandemic was limited to maintaining businesses affected by the lockdown through liquidity assistance and short-time working benefits, neither of which increased demand."

But this is now changing, says IW researcher Demary: "That's because investments in the energy transition and higher military spending are increasing demand for goods and services." The state continues to pump money into the inflationary system.

The IW has now identified six factors influencing stagflation:

De-globalization: the zero-covid strategy in Asia have led to container congestion via lockdowns at ports. Key raw materials and intermediates are not arriving or are arriving late. The rise in freight rates has made food prices more expensive. Russia's invasion of Ukraine has exacerbated the situation. Not only oil and gas, but also coal and uranium have become more expensive.
Decarbonization: The rising price of CO2 is supposed to make fossil fuels more expensive and thus force the transformation toward climate neutrality. However, since households cannot immediately invest in climate-neutral alternatives, the CO2 price first raises the cost of living.
Demographics: The shortage of skilled workers means that higher wages can be negotiated. A wage-price spiral is particularly the case in the U.S., where high unemployment means many labor contracts have to be renegotiated, and at the same time a wave of early retirements has set in, making labor scarcer. In Europe, the use of short-time allowances has mitigated this effect.
Digitization: Digitization has slowed inflation in recent years. Many electrical appliances have made a leap in quality without becoming significantly more expensive. This has a negative impact on the calculation of inflation. Due to the chip shortage, this effect has disappeared for the time being.
Government spending: With Russia's war on Ukraine, Europe needs to accelerate digital and climate-neutral transformation. Investments in cybersecurity and investments to mitigate energy dependence are needed. In addition, military spending must be increased. This will increase demand for goods and services. Shortages caused by container congestion in Asia will be exacerbated.
Monetary policy: Monetary policy did not have an inflationary effect in the years after the financial crisis, as states and also companies saved. However, due to the necessary investments in the energy turnaround and higher military spending, low interest rates are now having an inflationary effect.

And what are currently the biggest risk factors for stagflation? IW economist Demary sees two: "The zero-covid strategy and the associated container congestion at Asian ports, as well as the shortage and rising cost of energy due to Russia's war against Ukraine."

The Cologne-based IW is not the only one to draw a worst-case scenario. Professor Achim Wambach also sees a risk of stagflation. Wambach, president of the Center for European Economic Research (ZEW) in Mannheim, Germany: "In March, we observed the sharpest decline in ZEW economic expectations for Germany since the survey was launched in 1991," Wambach told FOCUS Online: "At the same time, expectations for the inflation rate rose."

And Wambach also sees the biggest risks for stagflation in a further rise in energy prices, for example due to an energy embargo, and supply chain issues, exacerbated by the lockdowns in China.

So the economists in Cologne and Mannheim agree on the risk analysis here. Wambach: "Another risk is the behavior of the central banks. They have to fight inflation without choking off the economy," says Wambach: "It won't be easy to get the increased inflation expectations back under control."

Translated with www.DeepL.com/Translator (free version)


Get your ticket, fasten your seatbelts and hug your loved ones one more time - it has begun.

Die Welt writes:

Time and again, economists push their way forward and convey an illusory sense of security with their analyses. But they should stick to their models. After all, science advises, but politics decides. The division of tasks is as simple as that - and not only in a crisis.

Germany will suffer a loss of prosperity. Almost everyone agrees on this when it comes to the consequences of the war in Ukraine. Even the federal government and the opposition agree on this in beautiful harmony. Federal Finance Minister and FDP leader Christian Lindner reads it like this in "Bild am Sonntag": "The Ukraine war will make us all poorer, for example, because we will have to pay more for imported energy.

And it sounds almost congruent on ARD's "Report from Berlin" with Friedrich Merz, the CDU federal and CDU/CSU parliamentary group leader: "We have probably, at least for a certain time, put the peak of our prosperity behind us. It's getting more difficult."

The only dispute - some of it fierce personal denigration and ideological mudslinging - is over whether the consequences of a Russia embargo will be catastrophic or remain manageable.

In the event of a renunciation of Russian oil and gas, some fear mass unemployment and a wealth-damaging de-industrialization of Germany. Others, however, predict only a reduction in GDP of 0.3 to three percentage points and, at most, in the very worst case, a drop in GDP of six percentage points. They downplay this as a large but not catastrophic effect that would probably cause a severe recession, but would be less severe than Corona's assessment.

As seldom before, the question of wealth effects and the economic assessment of the Ukrainian war and its consequences reveal the limitations of economic analyses. That is why it is so important to remain cautious about what exactly is meant by "wealth losses," how high they are, and who they affect. Economics is and remains a social science and a humanities discipline. Many things cannot be measured, evaluated, compared and concluded unambiguously, objectively and conclusively. This is already evident in the starting positions that are taken and the assumptions that are made.

For example, looking at the past - for example, the oil price shocks in the 1970s or the move to phase out nuclear energy in the 2010s - it seems plausible that the adjustment costs to a boycott of Russian energy would be higher and more severe in the short term than in the longer term. And in the end, a society is likely to emerge from crises even stronger rather than weaker because the cost whip gives legs to technological progress and breakthrough innovations.

However, when the short term ends and the long term begins remains hidden in the darkness of theoretical model calculations, but is of course of fundamental importance for the practice of the people and companies affected, for the industrial sector and their energy-intensive production facilities. The fact that everything adapts to new circumstances in the long term is as correct as it is trivial, but it doesn't really help companies that don't manage the change, or employees who lose their jobs, or families who can no longer get together the money to buy groceries for the week.

Anyone who is directly affected, has a job in an energy-intensive industry and earns a living, will assess the consequences of a loss of Russian energy quite differently than someone in a non-profit environmental organization who would like nothing more than to switch from fossil to renewable energy sources as quickly as possible in order to put the brakes on climate change in the long term. For that reason alone, it's no surprise that research from trade associations, the financial sector, and corporate practitioners attribute dramatic declines in growth and employment to sanctions against Russia.

In contrast, theory-driven model analyses of university origin arrive at a far more merciful verdict. In a statement, for example, the Leopoldina Academy of Sciences considers the consequences of a Russia embargo to be manageable. In most cases, the proponents of an import ban on Russian energy assess the long-term adjustment effects - i.e., in particular, the accelerated transformation from fossil to renewable energy - as more positive and the short-term costs for the population and companies as less significant than the opponents.

However, the question of what exactly one means by costs and what one means by benefits turns out to be a socially and thus politically decisive problem that cannot be solved by economics. Theoretically, this is still relatively easy to answer. One tries to monetize as far as possible, i.e. to measure prices or at least costs for everything and anything or to assume them with more or less convincing arguments and auxiliary quantities.

But even in the case of simple processes, it becomes difficult, because what is determined here and now may look quite different tomorrow under different circumstances. This is of course especially true in times of war and crisis, before and after a pandemic, or more generally in the case of rapid upheavals, which ensure that what was valid in the past no longer provides any insight into how the future will be.
The limits of economics

It becomes even more difficult to predict costs and benefits or even losses of prosperity when it is hardly possible, if at all, to monetarize politically induced consequential effects, for example when it comes to personal fates, fears of loss, changes in behavior, and the need to change jobs and locations.

What does it mean for a population when jobs are lost, everyday consumer goods are missing from the shelves, everything becomes more expensive - many things even cost much more, supply chains break down and even vital products threaten to fail?

At this point at the latest, macroeconomics - as the science of macroeconomic observation, in contrast to microeconomics, which is concerned with the economic actions of individuals, households and companies - reaches the limits of its possibilities.

This is where the sphere of politics begins. They have to weigh up and decide, in the knowledge that today's decisions will have economic consequences, both monetary and non-monetary, for many years to come and for generations to come. In theory, almost anything is possible, but in practice this is far from being the case and many things can only be realized with considerable side effects.

Therefore, the most that good macroeconomics can do in times of upheaval is to speculate about probabilities, to discuss plausibilities, to uncover what are more important and what are negligible influencing factors and to compare alternatives.

But whether an embargo, sanction, or other measure is politically feasible and socially acceptable cannot be proven with a macro model, nor with an input-output table, and certainly not with any simulation calculations. This was, is and will remain a matter for politics and not for science or experts. This applies not only in times of war and crisis, but also in the event of a pandemic.

Translated with www.DeepL.com/Translator (free version)

The Neue Zürcher Zeitung writes:


The European Central Bank (ECB) seems increasingly trapped in its own bubble. Inflation is rampant everywhere in the euro zone, but the ECB's Governing Council is stubbornly sticking to its ultra-expansive monetary policy and wants to retain further flexibility. This can only be explained by a denial of reality.

Europe is experiencing the highest inflation in forty years. Only between 1973 and 1981 did demonetization quote at a similar or higher level. Then, too, a mixture of very lax monetary policy, war and energy price shocks fueled inflation sharply. However, the European Central Bank (ECB) has so far hardly reacted to this development. It is increasingly losing touch with reality.
15 percent inflation in the Baltic states

In March, the inflation rate in the euro zone averaged 7.5 percent. In four member states, inflation has been in double digits - in some cases since December. In Estonia and Lithuania, it has now reached around 15 percent. These are frightening figures that were almost unimaginable a year ago, even for observers who were highly critical of the ECB. At such levels, the purchasing power of money is reduced by half in less than six years. To combat the high inflation rates, a restrictive monetary policy would now be appropriate. But the ECB is still light years away from this.

Measured by its measures, the central bank is instead still in crisis mode, continues to pursue an extremely expansive monetary policy, and is thus even helping to further fuel inflation. This is evident when looking at the neutral interest rate, which central bankers pay close attention to. At this interest rate, monetary policy would appear neither expansionary nor restrictive. The problem, however, is that the neutral interest rate cannot be calculated precisely, but only estimated. Many economists currently place it at around 1.5 to 2 percent.

Thus, to combat high monetary inflation, the ECB would have to raise policy rates above the neutral level for its policy to have a restrictive effect. Instead, the deposit rate, which has currently taken over the function of the key rate, is still at -0.5 percent and the actual key rate is 0 percent. To make matters worse, the monetary authority has still not ended its securities purchases, but is expected to do so only in the third quarter. According to the traditional measure of bond holdings, monetary policy is becoming even more expansionary from this perspective.

So far, there is little evidence that the ECB is adjusting to the changed environment. Its economists are sticking to their models, which, on the one hand, they themselves can influence with their assumptions and, on the other hand, are very much calibrated to the pre-pandemic world. However, these models have performed poorly over the past two years, as evidenced by the ECB's drastic adjustments to its own forecasts, which have repeatedly become necessary. The central bankers' models apparently do not capture the structural economic changes, namely higher commodity prices, longer-term disrupted supply chains and more.

As recently as March, ECB economists said they expected inflation to be around 2 percent in 2023 and 2024, which would be in line with the central bank's target. How inflation is expected to fall from what is likely to be 5 to 6 percent this year and, given increasingly likely second- and third-round effects, back to 2 percent so quickly remains a mystery.

Either the principle of hope now reigns in the ECB's glass tower, or a majority of Council members don't think high inflation is such a bad thing, given the ballooning national debt in some countries. It would not be the first time that a debt problem has been solved with the help of the central bank and financial repression through negative real interest rates.

But that would be disastrous for the ECB's reputation and formal independence. The "monetary guardians" should not repeat the mistakes of some central banks in the 1970s and allow themselves to be abused by governments for political purposes. The Governing Council would therefore be very well advised to finally focus on its noblest mandate: price stability.

Translated with www.DeepL.com/Translator (free version)



The ideological obduracy and substantive incompetence of the ECB can only be described as malignant. For many years, I have viewed central banks as the most powerful and devious manifestations of an international financial mafia. They not only overstep their only mandate - to ensure price stability by fighting inflation - but also deliberately act against it and arrogate to themselves other responsibilities for which they are not mandated at all. This is organized crime, and the fact that gangster Lagarde, this tight socialist soldier, now wants to force a property register in the EU, while the uselessness of such a register has been proven in the pre-emptive fight against money laundering in countries that already have such a register, only gives rise to fears of further terror on the part of the EU socialists: namely compulsory levies and expropriations: one paints oneself already a map and marks on it with whom there is how much to plunder. All in the name of social solidarity and justice, of course - that sounds GREAT, doesn't it...?

Insidious scumbags.

Can the EU do without China's critical metals?

https://beta.dw.com/en/the-eus-risky...als/a-61462687

Just because a lot of western countries have given up exploration of resources does not mean that they cannot be found here. It is just the laziness as long as you can get it cheaper elsewhere.
After the reunification Germany now indeed has a lot of rare earths, and additionally those for nuclear use of all kinds (220.000 tons of uranium ore mined for the Soviet Union until 1989).

^ The German horror has a name. Its "Genehmigungsverfahren" (approval procedure). That is so thick a grease than it could even stall a Russian ground offensive in its starting block. :timeout:

The energy transition does not magically make geopolitical dependencies disappear - it only produces new ones.

I don't know to what degree this is understood by the opinion in other countries, but in Germany most people are drunk of their hyper-mega-total-absolute-idealistic hysteric romanticism again, and where these people are confronted with inherent problems of their maximum demands, they avoid these by simply demanding even more unrealistic goals instead. No sense of realism, but only absolute and absolutistic 110% idealism - that should be realised by quite disinhibited totalitarian brain-washing and political control and planned economy. Only Black or White. No inbetween, no shades of grey, no colour. And this attitude manifestates more and more accpetance for quite ugly, totalitarian and inherently violent measurements to enforce compliance with "White" at any cost.

The resulting state will remind us more of conditions in China or the old GDR than we will find comfortable.

But they say one gets used to everything.


Neue Zürcher Zeitung:

A turn of the times also brings turncoats. This is particularly evident in energy policy: Green politicians from countries like Germany or Austria are making pilgrimages to Qatar, the small Gulf state with the world's third-largest natural gas reserves, to secure gas supplies from a source other than Russia.

Change of scene to the USA: American President Joe Biden had campaigned against climate change with an extensive "green" package. Now he is looking for ways to produce more oil and lower the price of gasoline so that his party does not fall behind in the midterm elections in the fall.

It shows strength, not weakness, to change one's mind in response to changed circumstances. However, a dangerous naiveté prevailed for a long time in the discussion about the energy transition. One consequence of the Russian invasion of Ukraine is that this naivety can no longer be afforded. The tragic war in Ukraine is now also dominating the discussion on climate policy.

There are two theses: Some say that the energy transition is suffering a setback because it is becoming clear that the energy supply does not currently work without fossil fuels. The others take the opposite view: Now is the time to push the use of renewable energies in order to become independent of petrostates like Russia. But this is a false dichotomy and only shows that the discussion about the energy transition has not made much progress.

Wishful thinking, however, cannot make the conflicting goals of a large-scale turnaround of an energy system disappear. The holy grail of energy policy is rather to reconcile security of supply, environmental compatibility and affordability. However, the "old" geopolitics of energy is not yet over; moreover, a "new" one is coming.

Wind turbines and solar panels, in the minds of many renewable energy advocates, are not only supposed to curb CO2 emissions, but also bring a geopolitical dividend. Because wind and solar would not have to be imported, dependence on oil- and gas-rich autocracies would magically dissolve, and with it a host of geopolitical conflicts.

Replacing fossil fuels with forms of energy that emit fewer greenhouse gases is a long process and a task of gigantic proportions. The mass of existing infrastructure and habits provides inertia. The goal is clear, the transition less so.

Large-scale solutions for storing excess electricity from renewables are still lacking. Therefore, for the foreseeable future, forms of energy are needed to guarantee the base load. This could be nuclear power, which is once again meeting with more approval. Or fossil fuels such as natural gas or coal will be used.

But even the goal is more uncertain than many think: The International Energy Agency (IEA), an organization of industrialized countries, worked out a possible path for a globally climate-neutral energy system in 2050.

https://i.postimg.cc/26HxDTW3/NZZ.png

Even in this scenario, the world cannot completely do without oil, natural gas or coal. The IEA still assumes that fossil fuels account for around one-fifth of primary energy consumption - primarily for the production of plastics.

The importance of fossil fuels will undoubtedly decline. However, the energy transition will not lead to a geopolitical land of milk and honey; rather, the process will be chaotic. In the face of electrification and digitalization, it is often forgotten that raw materials are an important basis for economic activity. Therefore, a realistic energy and climate policy must take into account the supply side for oil and natural gas, but also the metals cobalt, nickel or copper, which are enormously important for the energy transition.

The transition to an energy system with fewer greenhouse gas emissions will inevitably lead to winners and losers, some countries will be shaken up, and new conflicts and dependencies will emerge. Petro states are likely to give way to electric states. There will be two major problems in the process.

First, while oil and natural gas demand will decline over the long term, this does not necessarily mean that an era of cheap fossil fuels is dawning. Rather, prices for these will be subject to considerable fluctuations - with implications for security of supply. For petrostates, however, the more successful the energy transition, the more oil and gas producers will have to produce in order to keep revenues stable.

In the process, the foreign policy benefits of energy supplies are also losing value: The question arises, for example, as to how long the window will remain open in which - as in the case of Russia - Europe's energy supply can be used as a weapon. The Kremlin has already given an answer to this. Because Western companies, urged by politicians, the public and also investors, are increasingly withdrawing from the fossil fuel business, some petro-states are gaining relative market power - within a shrinking market.

This is especially true of countries with low production costs, such as Russia, Saudi Arabia, Iran, Iraq and some Gulf states. Venezuela, Angola, Nigeria, Azerbaijan and the countries bordering the North Sea, on the other hand, will fall behind. Conflicts within petrostates with sharply dwindling revenues and less stable political institutions are likely to increase.

Second, the world is sliding into new dependencies. Batteries, electric vehicles, solar panels or power lines require enormous quantities of metals such as lithium, nickel, zinc, copper and cobalt. Similar to many petro states, electric states will experience their version of the resource curse. An abundance of raw materials often fosters autocratic regimes, corruption, inefficient governance, and conflict.


https://i.postimg.cc/dQx9NHvx/NZZ2.png



For some metals, global dependence on a single producing country is disproportionately higher than for fossil fuels. For example, nearly 70 percent of all cobalt comes from Congo-Kinshasa, and about 60 percent of rare earths from China. "Today it's about natural gas from Russia, tomorrow it may be about deposits of lithium for battery production," summarizes IEA Director Fatih Birol in conversation.

The race for raw materials for the green future will become more intense. China is less reluctant than Europe and the U.S. to invest in countries with poor reputations. In addition, resource nationalism is likely to increase in the form of nationalizations of mining companies or high levies.

International energy and climate policy therefore requires more than climate conferences and the proclamation of lofty goals. It is also about keeping the economic and geopolitical risks of an energy transition in check. At the same time, the trap of a planned economy in the energy and raw materials sector should be avoided.

As a first step, this means that resource-poor countries should not limit their own room for maneuver with technology bans. The fact that Germany and Switzerland, for example, are at least openly discussing extending the operating lives of nuclear power plants is the right signal. In addition, the system of strategic reserves, which was introduced in the industrialized countries after the oil shock in the 1970s, must be expanded for natural gas, but also for "critical" metals.

Energy and commodity markets are extremely cyclical, which means that supply can lag demand and vice versa. In order to increase security of supply, a market for reserve capacity should be established not only in the electricity sector, but also for fossil fuels. In this context, companies would be compensated for providing spare production or supply capacities.

Renewable energy has also given rise to a belief in the feasibility of energy independence. More independence is indeed a goal, but the means go beyond narrow "green" policies: rather, more mining and extraction projects should be allowed in Europe, even the financing of oil and gas fields should be possible, so that the field is not just left to state investors from Russia, Saudi Arabia or China.

Climate policy should be based on a CO2 price and not on bans for idealistic reasons. However, this path to self-sufficiency must not degenerate into protectionism, and among the industrialized nations, only the United States has the potential for energy independence anyway.

The better way is to build more flexibility into the energy system and to keep the number of energy sources and energy suppliers as large as possible - in order to reduce dependence on a petro or electric state. This also means that even in the energy transition, raw materials from "difficult" countries must be used. This is the uncomfortable truth of the turn of the times.

Translated with www.DeepL.com/Translator (free version)

https://chrisveber.blogspot.com/



If a doctor misdiagnoses a disease, there is a high probability that his treatment will not improve the patient's situation. This also applies to the so-called guardians of our currency.

In Europe, the devaluation of money is exploding. Inflation is reaching a level that will soon make it impossible even for the middle classes to finance their daily lives. So the European Central Bank (ECB) will raise the key interest rate to get inflation under control. However, I believe that in doing so, the ECB is pouring gasoline on the fire.

The ECB assumes that, according to classical doctrine, the increase in the price of money as a commodity will lead to a slowdown in growth and thus inflation. It also assumes that inflation is largely based on an oversupply of capital. After all, the ECB has inflated its total assets from 1.5 trillion euros in December 2007 (before the 2008 bank bailout) to 8.78 trillion in April 2022. This flood of money has indeed already led to inflation, but until now it was called "rising stocks and real estate values," was popular among the very wealthy, and (except for real estate prices) had no impact on the lives of ordinary people or companies. Because the flood of money never reached them. Or do you know an employee or a carpenter whose bonds were bought by the ECB? Or a plumber who was able to draw down capital interest-free?

So if we have had an interest-free money glut for 14 years, why are prices in the real economy only now rising? Because the unchanged purchasing power of ordinary people and companies is only now coming up against a drastically tighter supply of goods and thus driving up prices.

In my opinion, there are two reasons for this. The Corona "measures" and the "energy turnaround," i.e., the shortage and increased cost of energy.

The Corona lockdowns have permanently destroyed global supply chains. Anyone who has tried to buy anything lately, anything at all, be it a Playstation 5, a car or even a bicycle, will know what I am talking about. Even home builders have found that there is simply a lack of everything. The global economy is a highly complex and interconnected system that cannot simply be turned on or off at will - as quite a few of our politicians and "experts" apparently believed. Repairing the damage done by the Corona "measures" will take years. But only if this insanity is not continued and supply chains can finally settle down.

The "energy turnaround," on the other hand, has led to a jump in gas prices in particular. As of mid-year 2021, the Dutch TTF gas price (a reference price in Europe) has risen, with a nice peak after September 26. What happened in 2021? In June, the European Climate Change Act was approved by EU ministers. And September 26 was the German federal election. So it was reasonable for gas suppliers to assume that achieving the "climate targets" and Europe's largest economy phasing out nuclear and coal would lead to increased demand. Gas prices were rising long before Putin's invasion of Ukraine. By the way, gas supplies from Russia and transit from Ukraine were uninterrupted until recently (since April 27, gas has not been supplied to Poland and Bulgaria), so the gas price increase can be attributed to speculation rather than shortages.

But rising energy prices are not a problem for our governments. After all, less should be consumed. For the sake of the climate. What our governments have not considered is that energy and gas are necessary for any economic activity. For the transport of goods as well as for the production of artificial fertilizers. Producers like BASF or Yara have already completely or partially stopped the production of artificial fertilizers in the fall of 2021. Because of gas prices. Less fertilizer leads firstly to less food production and secondly to higher fertilizer prices for farmers. Which in turn will both cause consumer prices to rise rapidly.

Perhaps our governments should have taken a look at a satellite image of Africa at night before deciding on various energy changes and taxes. There you can see what energy poverty and a "supply-oriented energy supply" mean. Poverty. Shortage. Which, by the way, is also a reason for migration from Africa to Europe. Polemically, at least migration will then stop when Europe has reached the economic level of Africa.

The inflation that can be felt in everyday life is therefore due to the economy's lack of production, which has become deliberately more expensive. Now the ECB is raising the key interest rate in order to curb economic growth, thus throwing an additional cudgel between the legs of production, which will make supply even more difficult. I'm not one hundred percent sure that's a good idea. Small and medium-sized businesses, in particular, are already battered enough by the Corona "measures," and an interest rate hike could be the final push into the abyss for many. And the increase in the cost of money as a commodity, which like energy is included in all products, would of course be passed on to consumers.

What an interest rate hike could do is cause the euro exchange rate to rise against other currencies. And thus a cheapening of imports. But whether this rise would offset the burdens is uncertain. Just as any economic "science" is uncertain because it is a social science. It humanizes, forecasts should be read with as much caution as the predictions of Corona modelers.

What would really combat price increases would be a sure end to all Corona "measures," a rollback of tax increases on energy, and an acknowledgement that an industrialized continent cannot run on wind and solar.

Incidentally, there will be great wailing and lamenting in the financial markets if the ECB scales back its bond purchases and shrinks its balance sheet. But dividends will continue to be paid, and falling housing prices should not be the biggest problem of all.

Translated with www.DeepL.com/Translator (free version)

Had a discussion with someone from Bosnia. While we agreed about what we think of Putin and Russia he wondered why prices are skyrocketing everywhere. Putin has not delivered less gas or oil, yet. So why?
And why are e.g. vegetable oil prices rising so crazily?
From Poland to the baltic states, Czechia and so on, the shelves are full of wheat, vergatable oil, all to be had for normal prices. Fuel costs are about as high as in january. Not so in Germany.
He blamed it on german panic and stockpiling, along with certain companies' greed, having a pretext to make more money.

Different countries/government have different priorities and options to subsidize porices. The french state "owns" the nuclear sector, so the president there has otrher options to limit prices and subsidize electricty on behalkf of the consumers(=voters), than the German government has. Same may be true for Baltic states and Slovenia, Poland, regarding sunseed oil or wheat. But that wheat has risen drmatzaically in prices is a fact that you can easily check at the globe's most important wheat trading platform, the exchange in Chicago:


https://i.postimg.cc/Y9QtPFX2/wheat.png


Sunseed oil may be a typical German thing again (I dont buy it anyway...), but in many Arab and African countries where wheat as well as sunflower oil are ab sic foods, prices have exploded as well. It will become worse with Ukraine exports breaking down and Russia certainly using wheat as a wepaoin to blackmail influence and also chasing prices up to generate higher income, like OPEC not producing more oil to drive oil prices.



It can become worse again later on when fertilizers become a rare commodity, too.



Its a viscous circle. The whole collapse of global supply chains is. Even if from now on politicians would do everything perfectly correct and right, it will take years for them to normalize. I expect inflation to become two digits, and stay high for years. Add to this that soon here in Europe states will bitterly compete for gas (not only as an energy carrier, but a production commodity), and electrical power.



The good thing is that reality will mercilessly break certain ideological hobby projects by the ultraprogressives. With their wanted green dreal policies they make evertyhing just worse. It is doomed to collapse sooner or later. So is the wanted fincial penalising for fossil fuels. Even nuclear energy will be back - French dominated thanks to Merkel's brainless idiocy. They will give these errings up - or see Europe cooking up in social unrest and maybe even regional rebellions and revolutions, who knows. Its all home grown, and it could have been known in advance. Idiots. Possible that the states react with "administrative violence": establishing police states and total surveillance tyrannies that replace liberal democracies. All under the name of "digitalization".



The nice post WW2 times are over. From now on things will get dirtier, ruinous and very expensive. I do not think the world will recover from the collapse of global supply chains, will not return to like things were before 2020.

Besides blaming inflation on Germans ;), price gouging, speculators and hoarders. I’m not sure if yours or other governments are print and spend. Even if they are not I can’t help but think our actions may be spilling over and affecting others economies as well.

The Bank of england has raised interest rates to 1 %, three of the nine board members even wanted to raise them to 1.25.

The FED just added 0.5 to the interest rates, pushing them to 0.75-1.0%. Faster than weas expected, one expected a 0.25% raise only. But somethign - finally - rings the alarm bells even over there in the US, I wonder what it is...

And Gangsterlagarde and her accomplices in the ECB? They continue to find lazy excuses to sit back and do nothing, and to let inflation run wild in order to continue to engage in forbidden state financing. Planned economy theorists can be relied upon.

I am not even trying to pretend that i understand economic cycles, but the text you posted helped me understand it a bit better.

Of course the dollar and what happens with it will influence other economies. Not with bribing or such direct action, but markets react to all kinds of rumours. Which is why i think economy is a crazy random circus, not a science, and can thus not be foretold

Spiegel wrote a few years ago:

"If Sarkozy interrupts his vacation, the markets interpret his sudden return as a sign that the situation there is worse than they thought -
and promptly set their sights on the country.

And if there is an argument between Italian Prime Minister Silvio Berlusconi and Finance Minister Giulio Tremonti, then the markets target Italy, because they doubt that the Italian government is serious about introducing austerity measures.

The markets take advantage of every weakness and every rumor to speculate against one country after the next.

In doing so, they aggravate the crisis. Once a country has become the subject of rumors and speculation, other investors become nervous. Fearing further price declines, pension funds and insurance companies also start selling stocks and bonds. In the end, fear nurtures fear and a panic ensues."

Hopefully the interest rate on savings will follow shortly.

The UK is affected by prices rising across the globe. So there is a limit as to how effective UK interest rate rises will be in curbing inflation.

However, other countries have been adopting a similar approach, and have also recently been raising their interest rates:

United States: raised rates to 1% - its biggest interest rate increase in more than two decades
India: raised rates to 4.4% - the first rate hike in two years
Australia: raised rates to 0.35% - the first rate rise in over a decade
Mexico: raised rates to 6.5%

Something absolutely profound about inflation:

"Inflation, as this term was always used everywhere and especially in this country, means increasing the quantity of money and bank notes in circulation and the quantity of bank deposits subject to check. But people today use the term `inflation' to refer to the phenomenon that is an inevitable consequence of inflation, that is the tendency of all prices and wage rates to rise. The result of this deplorable confusion is that there is no term left to signify the cause of this rise in prices and wages. There is no longer any word available to signify the phenomenon that has been, up to now, called inflation. . . . As you cannot talk about something that has no name, you cannot fight it. Those who pretend to fight inflation are in fact only fighting what is the inevitable consequence of inflation, rising prices. Their ventures are doomed to failure because they do not attack the root of the evil. They try to keep prices low while firmly committed to a policy of increasing the quantity of money that must necessarily make them soar. As long as this terminological confusion is not entirely wiped out, there cannot be any question of stopping inflation." - Ludwig von Mises

He called inflation "an unworkable fiscal policy". And the president of the Reichsbank in Germany in the mid and late 20s of the last century fell exactly into this trap and misunderstood the terms, and in order to fight high prices and helkp worker to get along pumped out more money to the crowds. We all know how it ended.

The ECB today does exactly the same, so do and did the other centrla banks. Nobody has a knoweldge for what von Mises says, althogh it is so very profound and elemental. This is part of most basic economic on 1 0 1.

The consequences of respecting this and actign accordngly would limit the reach of what staes, parties and politicians can do and then get away with, at the cost of later generations. Thjats why govenrment tell you that ifnlation is wnated, must be controlled, and is positive. No, it is not, never was, never will be. Its completely illogical to claim so. Keeping to these nonsense claims is living evidence for that the idiots running state financial and economic politics have absolutely no clue about what they are doing there. Or they know it but keep on doing the wrong thing, then its rightout malice. Gangsterlagarde and Criminaldraghi being good exmaples. Thats why I call them this way, because thats what they and their collegues are: gangsters and criminals.

The car is so deep in the swamps now that not even the upper tip of the roof antenna sticks out anymore, so do not ask me how to get it out there without making yourself wet and getting dirty hands. The desaster cannot be avoided, because it already has been completed. What now comes is not the desaster, but its symptoms and consequences. With debt loads, Corona, collapsed supply chains and war all coming together for a perfect storm, each of them serving as a catalysts accelerating things.

I talked of this since many years, haven't I. And now it has begun.


Edit. I am not certain. The currency units (I do not call FIAT money a money) that have been created and handed out, must be collected and destroyed again. The number of currency units in ciruclation must be reduced, dramatically. So maybe it might help to hand out coupons for the basic goods and basic supplies of ordinary life, instead of paying out money ("Oh, that is so against human dignity, we cannot do that!") And instead of prohibiting the buying of things or rationing, auctions on certain, especially industrial comodities, might be an idea worth to consider, so that companies can and must weigh themselves what worth certain things - energy for exmaple - has for them, or whether they find workarounds and innovations so that they do not need to buy needed stuff for high prices ("Oh, that is so coldhearted and socially inuzst to do, we cannot do that!") . Finally, companies that can not do either the one or the other must be allowed to go bancrupt and leave the market competition. The extremely high rate of zombie companies, which has exploded further during the Lockdowns, which hangs like an increasingly heavy millstone around the neck of the competitive companies, must be dramatically cut back. The zombies have now started to pull the others down the abyss along with themselves. Too much burden is too much burden. ("Oh, that will cost jobs [hahaha, you suckers call that jobs? I call it occupational therpay to hide the economic symptoms] we really cannot do that!")

Of course, no government in the West will do any of these things. Instead they will paint the New Money Theory in new gold and dance around it. Although it is nothing than old lousy wine in new bottles. It poisended the drinker back then, and still does so today. In times of pain, the false messiahs appear and travel across the country, a rat tail of people in their wake.


Well, only panic on the Titanic. Happy sinking. Thanks but no thanks for pulling me down alongside with you. I am not grateful.

Also, besides print and spend inflating prices. Severe drought and war have affected wheat prices as well. Nothing wrong with a few extra pounds of flour next time you go shopping. Just be thankful you don’t live in Egypt. They import something like 80% of their grain from Russia and Ukraine, things aren’t looking good for them. Chickens need grain to lay eggs too


Drought impacts U.S. wheat, barley, bean output
Texas Crop and Weather Report – Sept. 8, 2021

https://agrilifetoday.tamu.edu/2021/...y-bean-output/

I love my hirse. Most of it comes from China. :D

"40% Losses." Focus writes:


The Norwegian sovereign wealth fund is seen as a role model by many German investors. Its head Nicolai Tangen is now warning of the serious consequences of inflation for many investors. He expects losses of up to 40 percent.

Nicolai Tangen calls the current economic situation a "new era." The head of the Norwegian sovereign wealth fund had warned early on about inflation, as well as the serious consequences. Putin's invasion of Ukraine is now doing its bit to keep returns down for investors, he said. "The Ukrainian war is increasing price increases," he told the "Wirtschaftswoche".

He uses a comparison to illustrate how precarious the situation is for savers: over the past 25 years, investors in the Norwegian sovereign wealth fund could expect an annual return of 6.6 percent. "That's no longer possible in the next ten years," he warns. "Investors should be happy if they make any profits at all," he concludes.

Tangen expects prices to remain high - possibly even rise further. "Prices could rise even faster than before because many factors are driving inflation," he explains. For example, globalization and free world trade, which once led to low prices, are being reversed. At the same time, there is a shortage of labor in many sectors. In addition, prices for energy and raw materials are rising.

Accordingly, he is critical of the fact that the European Central Bank (ECB) had only held out the prospect of raising interest rates in the euro zone for the summer: "In my opinion, the ECB is lagging behind," Tangen said. He said he was puzzled by the decision to leave interest rates at the current level for now. Rising inflation will lead to rising interest rates sooner or later anyway, he said.

The head of the Norwegian sovereign wealth fund paints a gloomy scenario: Companies and consumers would then be able to buy fewer goods and would find it more difficult to obtain loans for certain goods. This makes it more likely that high inflation will be coupled with low economic growth - "and that in a phase in which valuations are already high, in which stocks and bonds are already expensive."

Such a situation is called stagflation. "If we suffer losses in all asset classes in such a situation, we face losses of up to 40 percent," Tangen further warns. Stress tests showed that.
Investors must be prepared

So investors are facing extremely challenging times. What this new "era" could mean for investment strategies was recently explained by expert Ingo Mainert to FOCUS Online: "Old virtues do not have to be fundamentally thrown overboard, but the current situation requires new approaches in some cases," he wrote in a guest article at the beginning of April.

Translated with www.DeepL.com/Translator (free version)