(Crazy) economy news

[mapuc]

More and more people here in Denmark are getting positive towards Nuclear power.

Markus

[Skybird]

Heartless cold reality tramples brutally on ideological opportunism.


Another Merkelian maximum-effect desaster: first destroying German nuclear power and engineering competence, rated to be amongst the globe's leading quality and security producers, and now u-turning again and having left germany depending on French nuclear power imports. Maximim losses for Germany, high profits for France, a shifting of the balance of power as well. Skrupelloses dummes Weibsstück.



Die Welt writes on Germany's apparent U-turn on nuclear power:


The subject was not on the agenda, but the advocates of nuclear power did not allow themselves to be dissuaded. At the emergency summit of the EU energy ministers, a show event at which the high energy prices should be publicized, the camp of the pro-nuclear countries spoke up anyway.

"Many delegations" have demanded that Brussels take a quick position on nuclear power, said the Slovenian Minister of Infrastructure Jernej Vrtovec on Tuesday afternoon after the meeting.

It is about a dispute that has been dividing the EU for months: is nuclear power a sustainable option in the fight against climate change? For the nuclear industry - above all the French - this determination determines the economic future. And for many countries it is about the energy mix for the coming decades.

The decision is part of the so-called taxonomy, a kind of green bible that is supposed to determine which investments are climate-friendly. In the years to come, the determination will have a major impact on where billions of investor money and EU funding will go - and where not.

And it will depend on how easily companies and states can finance new nuclear power plants, repositories and the infrastructure related to nuclear power.

No wonder that France has been vehemently advocating nuclear power in Brussels for years. Not only does the country's power supply depend largely on nuclear fission; the state also holds more than 80 percent of the highly indebted nuclear power plant operator EDF.

And the government wants to continue expanding nuclear power. According to the French government, President Emmanuel Macron wants to present concrete plans for new nuclear power plants in the next few weeks. Up to six new pressurized water reactors are planned.

Many billions are involved: EDF has been building such a reactor at the Flamanville site in Normandy since 2007; the costs on the breakdown site have meanwhile increased almost sixfold to a good 19 billion euros.

So far, other EU countries have resolutely rejected nuclear power; Alongside Austria and Luxembourg, where Europe's most resolute nuclear power opponents are based, Germany was also one of the most committed opponents at the EU level.
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But probably not anymore. Chancellor Angela Merkel apparently gave in at the summit of heads of state and government last Thursday and Friday.

This is how observers interpret at least an announcement by Ursula von der Leyen, President of the European Commission, at the press conference after the summit. The politician announced there and in a Twitter message that she would submit a proposal for the EU sustainability label, which also includes nuclear power and gas.

"We also need a stable source, nuclear energy, and of course, in transition, natural gas," she said. "That is why we will present our proposal for the taxonomy."

This decision came as a surprise to observers, as Financial Markets Commissioner Mairead McGuinness had only said last week that the authority might take time to make the far-reaching decision by next year.

Apparently Merkel and Macron made a deal at the summit. The commission has always made it very clear that the authority will only make a determination for the taxonomy if Germany and France are in agreement on the issue, French government circles told WELT. It was apparently so far at Merkel's farewell summit.
New members in the pro nuclear power camp

In fact, Germany was largely sidelined in the dispute. At the beginning of the debate, two years ago, the camps between supporters and opponents of nuclear power were still balanced. However, the new, stricter EU climate targets and the sharp increases in energy prices in recent months have evidently led some countries to rethink. The nuclear proponents are now in the majority.

At the European level, France was able to poke around a number of states that also rely on nuclear power for climate protection. Finland is part of the fact that France is currently building an EPR reactor, as well as Bulgaria, Poland, Croatia, Romania, Slovakia, Slovenia and the Czech Republic.

Ministers from these countries had published a pro-nuclear appeal in WELT. Recently, Sweden and the Netherlands, where new nuclear power plants are being considered, have apparently also switched to the pro-nuclear camp.

The high energy prices and the dependence of many countries on natural gas also apparently contributed to this. In Germany, too, natural gas is seen as an important energy supplier in the transition to climate-neutral energy sources. But France had always threatened to veto if the Commission declared natural gas to be sustainable, but not nuclear power.

Von der Leyen's declaration makes it clear what Germany and France have agreed on: nuclear power will be considered sustainable for many decades, natural gas at least for the coming years of transition. Austria and Luxembourg were extremely angry after von der Leyen's statement, it is said in Brussels.

Nuclear opponents reacted disappointed. "Merkel has given up her resistance to the greenwashing of nuclear power, I don't know why," says Sven Giegold, an influential member of the Greens in the European Parliament. “With this she gave von der Leyen the green light. If von der Leyen now says that she will include atomic energy and gas in the taxonomy, the member states can no longer prevent her from doing so. "

In fact, the change is recorded in a so-called delegated act. The Member States can only object to this with a qualified majority; In this case, however, it hardly appears to be achievable. Giegold started a petition in response. The central demand: "The EU proposal must not be submitted before the new federal government is in office."

[Rockstar]

Buckle up everyone we gonna crash


Press Release

PDF
November 03, 2021

Federal Reserve issues FOMC statement

For release at 2:00 p.m. EDT

https://www.federalreserve.gov/newse...y20211103a.htm

The Federal Reserve is committed to using its full range of tools to support the U.S. economy in this challenging time, thereby promoting its maximum employment and price stability goals.

With progress on vaccinations and strong policy support, indicators of economic activity and employment have continued to strengthen. The sectors most adversely affected by the pandemic have improved in recent months, but the summer's rise in COVID-19 cases has slowed their recovery. Inflation is elevated, largely reflecting factors that are expected to be transitory. Supply and demand imbalances related to the pandemic and the reopening of the economy have contributed to sizable price increases in some sectors. Overall financial conditions remain accommodative, in part reflecting policy measures to support the economy and the flow of credit to U.S. households and businesses.

The path of the economy continues to depend on the course of the virus. Progress on vaccinations and an easing of supply constraints are expected to support continued gains in economic activity and employment as well as a reduction in inflation. Risks to the economic outlook remain.

The Committee seeks to achieve maximum employment and inflation at the rate of 2 percent over the longer run. With inflation having run persistently below this longer-run goal, the Committee will aim to achieve inflation moderately above 2 percent for some time so that inflation averages 2 percent over time and longer‑term inflation expectations remain well anchored at 2 percent. The Committee expects to maintain an accommodative stance of monetary policy until these outcomes are achieved. The Committee decided to keep the target range for the federal funds rate at 0 to 1/4 percent and expects it will be appropriate to maintain this target range until labor market conditions have reached levels consistent with the Committee's assessments of maximum employment and inflation has risen to 2 percent and is on track to moderately exceed 2 percent for some time. In light of the substantial further progress the economy has made toward the Committee's goals since last December, the Committee decided to begin reducing the monthly pace of its net asset purchases by $10 billion for Treasury securities and $5 billion for agency mortgage-backed securities. Beginning later this month, the Committee will increase its holdings of Treasury securities by at least $70 billion per month and of agency mortgage‑backed securities by at least $35 billion per month. Beginning in December, the Committee will increase its holdings of Treasury securities by at least $60 billion per month and of agency mortgage-backed securities by at least $30 billion per month. The Committee judges that similar reductions in the pace of net asset purchases will likely be appropriate each month, but it is prepared to adjust the pace of purchases if warranted by changes in the economic outlook. The Federal Reserve's ongoing purchases and holdings of securities will continue to foster smooth market functioning and accommodative financial conditions, thereby supporting the flow of credit to households and businesses.

In assessing the appropriate stance of monetary policy, the Committee will continue to monitor the implications of incoming information for the economic outlook. The Committee would be prepared to adjust the stance of monetary policy as appropriate if risks emerge that could impede the attainment of the Committee's goals. The Committee's assessments will take into account a wide range of information, including readings on public health, labor market conditions, inflation pressures and inflation expectations, and financial and international developments.

Voting for the monetary policy action were Jerome H. Powell, Chair; John C. Williams, Vice Chair; Thomas I. Barkin; Raphael W. Bostic; Michelle W. Bowman; Lael Brainard; Richard H. Clarida; Mary C. Daly; Charles L. Evans; Randal K. Quarles; and Christopher J. Waller.

Implementation Note issued November 3, 2021

Last Update: November 03, 2021

[Skybird]

Finanz und Wirtschaft comments today:

-----------------
France has no coal, no gas, no oil - so no choice: That may be, in short, the Cartesian logic behind Emmanuel Macron's announcement that France will build new nuclear power plants. In any case, it is a clever move with a view to the presidential election in five months' time. Macron has not yet officially announced his candidacy, but there is no doubt that he is aiming for a second term and that he has a good chance of being re-elected.

His current move signals to the people that security of supply is a top priority and that it will be tackled; at the same time, Macron shows where he sees the ideal route to decarbonisation. This «Paris Gambit», to stay in chess jargon, is Gaullism pure et major, and this alone proves that Macron is up to date like hardly any other statesman in Europe (at best Boris Johnson, who admittedly also relies on nuclear power; do not be fooled by his flaunted frivolity).

In his declaration on the energy strategy, Macron said in no uncertain terms that independence and sovereignty were at stake: France definitely does not want to take the risk of being vitally dependent on imports of electricity. This is exactly in line with the nuclear policy that Charles de Gaulle initiated in liberated France as early as 1945 - the thunder of the Second World War, especially the two explosions over Hiroshima and Nagasaki - still echoed. After that, research was carried out in the nuclear sector, largely with a view to civilian use, but not much was done in the Fourth Republic in terms of industry or even more militarily.

After his long “traversée du desert”, the twelve years away from power, de Gaulle returned in 1958 and established the Fifth Republic, which was focused on the president, to suit his taste. It immediately revived France's hitherto half-hearted nuclear policy, primarily with a view to military use: the Soviets tested their first nuclear missile in 1949, and the British in 1952. France stood there naked, so to speak, depending in an emergency on the benevolence of the unloved Anglo-Saxons.

De Gaulle's political guiding star was gone from the start, when he decided in 1940 for the resistance in exile in London instead of the collaboration in Vichy, until the end of France's independence and honor; As old-fashioned as it may sound today, it was so successful. Thanks to de Gaulle's determination, France, the loser of the war, miraculously made it to the table of victorious powers and as a veto power in the United Nations Security Council.

In order to show the weight necessary to maintain this status, from the point of view of the general, and objectively plausible, it was essential to arm France with nuclear weapons. National security and independence, influence as a great power and international respect - these big goals needed the little atoms.

After all, France had a long tradition in nuclear research: Henri Becquerel and the Curie family - Marie and Pierre Curie, their daughter Irène Joliot-Curie and her husband Frédéric Joliot-Curie - were all Nobel Prize winners in physics and chemistry, respectively. Before the outbreak of World War II, France had also begun to clarify the military potential of nuclear fission. The French explorers were active in Montreal during the war; the Americans did not allow them to participate in the Manhattan project in Los Alamos.

At that time, de Gaulle's directives were quickly put into practice. The first test was carried out in the Algerian desert at the beginning of 1960. «Hourra pour la France! Depuis ce matin, elle est plus forte et plus fière », de Gaulle congratulated his Defense Minister Pierre Messmer. During the Cold War, which threatened to get hot in those years, at the time of the Cuban Missile Crisis, France now had a "force de dissuasion" at its disposal, frightening enough to deter the Soviet leadership from gambling games in Western Europe. From 1959 de Gaulle withdrew France's troops step by step from the military command structure of NATO. The republic no longer relied on the American nuclear umbrella; it had its own.

There was also progress in the civilian sector; In 1963, the first French nuclear power plant fed electricity into the grid. Today France operates 56 reactors at 18 locations. The last kiln so far went online in 1999; The Flamanville nuclear power plant has been under construction since 2007, which is obviously not making any headway and is becoming more and more expensive (quasi a Berlin Airport 2.0 on the Norman coast). France's electricity consumption has long been geared towards nuclear power from head to toe: 70% of the electricity comes from nuclear generation.

Replacing these enormous capacities - only the USA and China have larger ones - with wind and solar energy alone is more science fiction than science. In Switzerland, by the way, the share of nuclear power is still around a third. Furthermore, it should not be forgotten that after the Kaiseraugst project was abandoned in 1988, the Swiss energy companies bought substantial subscription rights from Électricité de France. One bon mot is right: Kaiseraugst was built in France.

Macron's reactor renaissance ultimately follows de Gaulle's highest maxim of securing national freedom of action, updated with a European perspective, but the Élysée will always reserve the last word. States don't have friends, they have interests - this frosty formula of the legendary “grand Charles” still applies in Paris, only garnished with an “inclusive” (isn't that what they say today?) EU commitment.

When and where and with what output the new series of nuclear power plants will go online is still open, but if the project works to some extent, the country will probably cope with the foreseeable electricity shortage in Europe better than, namely, Germany, by far its most important neighbor . The Merkel government, which is now gradually dwindling, hastily announced its exit in 2011 after the reactor accident in Fukushima. The dubious German turn away from nuclear production, stupidly just at the same time as the actually correct exit from coal-fired power generation, followed, as the only other country, Switzerland (Belgium fluctuates). Where else Bern acts more soberly than Berlin.

It will not be necessary to explain to Emmanuel Macron that an electricity croesus France will win over an electricity beggar Germany at Postur. From the point of view of Switzerland, where word got around now, very late, that electricity is becoming increasingly scarce, under these circumstances it might be worth considering buying the French Rafale fighter plane instead of an American jet; why not a diplomatic bargain with an electricity clause? Of course, it would be even more reassuring to expand our own generation, massively, and without blinkers when it comes to nuclear power.
-------------------
https://www.fuw.ch/article/macrons-r...gaulles-geist/

[Skybird]

Rainer Zitelmann, author of "Die 10 Irrtümer der Antikapitalisten", writes for NZZ:

Yesterday I had an interview of several hours with a journalist from a large daily newspaper about my book "The 10 errors of the anti-capitalists", which will be published soon. His first question was whether I might not be fighting the battles of past decades, since by now it was clear to almost everyone that capitalism was superior to the planned economy.

I thought that the topic was more topical today than ever before and was confirmed today when I read that the EU Commission under Ursula von der Leyen is now coming up with the next idea after the "taxonomy" debate on sustainability. If the first part was about distinguishing between sustainable and non-sustainable forms of energy production, now it is about distinguishing between socially useful and socially useless companies.

The Brussels classifications are then supposed to steer investors' money in the "right" direction. This means that if politicians and civil servants feel that a company is not paying all its employees the "right" wage, it can be classified as anti-social. If politicians feel that the board's salary is too high compared to the average employee, that is another indication of antisocial behavior. If politicians and civil servants believe that the rents charged by a real estate company should be lower, again there is a risk that the company will be classified as antisocial.

Dr. Rainer Zitelmann holds a doctorate in history and sociology. He has written and edited 25 books, including "Capitalism is not the problem, but the solution" and his new book: "The 10 errors of the anti-capitalists". As an entrepreneur he built up a fortune of millions. He is a member of the FDP.
The benefit of a company for society as a whole is to be evaluated, i.e. whether the company serves the so-called common good or not. In the case of some companies (e.g., cigarette manufacturers), this is denied from the outset; in the case of other companies, classification systems are created and the question of whether they are useful or not is not decided on the market, but in political discussion groups. The Greens and the SPD have already expressed their enthusiasm for this idea.

I think lobbyists will also be enthusiastic, because they now have a whole new field of activity: they have to convince politicians why their company is "socially useful" after all.

Of course, none of this has anything to do with a market economy. It is typical of systems with a state-planned economy that politicians determine how money is distributed in an economy, what should and should not be produced - and in what quantity it should be produced. In a market economy, companies decide - and whether a company is useful or not is determined every day by consumers with their decisions.

Therefore, there is nothing more democratic than capitalism. For a long time, the Albrecht brothers were the richest Germans in Germany. Why? Because they had a good idea with the Aldi discounters, namely how to offer good quality products at a low price. Millions and millions of customers have made the company big and its founders rich with their purchasing decisions.

Biontech was financed by private investors to the tune of more than one billion euros - and they had to endure twelve years of losses, during which they accumulated more than 400 million euros in losses. Government grants initially played little role compared to the more than one billion in funding - the government saw research funding for mRNA research as too risky.

Only when the mRNA technology was mature and it was a matter of setting everything in motion so that the vaccines could be produced in sufficient quantities did government funds of 375 million euros flow.

What does this have to do with the topic? Friedrich's August von Hayek, winner of the Nobel Prize for Economics, described the "presumption of knowledge" as the central error of all socialists. State planned economies have failed time and again because they were based on the conviction that politicians and civil servants know better what is good for people than companies and consumers.

The planned economy is celebrating its resurrection in Brussels. What is "socially beneficial" and what is "socially harmful" is again determined by politicians, not by the despised market. There have been at least 24 socialist experiments in the last 100 years - but all of them, without any exception, have failed. But with the distance from failed socialism, the thinking that guided all these experiments is celebrating a resurgence. Today it is no longer called "socialism", but e.g. "fleet targets" (politicians in Brussels determine which cars should be produced) - or "social taxonomy".

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


He who thinks the DDR (GDR) is dead and over, is wrong. It lives and is more prosper than ever.

[Skybird]

https://www.ortneronline.at/die-infl...um-zu-bleiben/


Inflation, come to stay

(ANDREAS TÖGEL ) By now, it is not only consumers who have noticed that they are currently confronted with strong price inflation affecting all essential expenditures. Mainstream economists are also coming to the realization that inflation of 5.1 percent is a veritable problem (as reported by "Exxpress"). What is surprising, at best, is that it has taken so long for Ms. Reinhardt and her colleagues - unlike the representatives of the "Austrian School" who have been criticizing the reckless monetary policy for years - to smell a rat.

What is original about Carmen Reinhardt's criticism of central banks' policies is the accusation that they did not "react" to inflation in time. How were they supposed to "react"? After all, by unrestrainedly inflating the money supply, they were and are the originators of inflation. If they had not given in to the demands of politicians for years to constantly pump new liquidity into the system, the problem would never have arisen. For it is not greedy entrepreneurs, as left-wing Senator Elisabeth Warren of Massachusetts claims, or adverse natural events that are to blame for inflation, but monopolistic money producers who issue legal tender in any quantity desired by governments. For decades, the money supply worldwide has been growing much faster than the production of goods.

The father of the "economic miracle" in post-war Germany, Economics Minister Ludwig Erhard, had this to say about it: "Inflation does not come upon us as a curse or as a tragic fate; it is always caused by reckless or even criminal policies."

Senator Warren contends that corporations cause inflation because they raise their prices as they see fit to increase their profits. Rarely has a claim been made that is clouded by so little economic understanding. For even leaving aside the fact that competition never sleeps, even the largest multinational corporations would, in the event of arbitrary price increases and all other things being equal (i.e., with an unchanged money supply), be left sitting on large parts of their production, because they would then lack the money to purchase them. Even Koko the gorilla would have understood that Mrs. Warren is attacking the wrong addressees.

Debtors whose liabilities are devalued are the beneficiaries of inflationary monetary policy. Who are the biggest debtors? Not companies or private households, but governments. And who determines - directly or indirectly - the monetary policy course of the central banks? In the case of the USA, England, China or Japan, the respective government. In the case of the EU, the Commission and the EU Parliament. This is proof in the sense of Ludwig Erhard: Politics has a hand in the cradle of inflation.

Two quotes from the former head of the U.S. Federal Reserve, Alan Greenspan, put it in a nutshell: "The United States can pay off all its debts because it can always print money to do so. So there is no likelihood of nonpayment." The alchemists' dream has thus come true: the central banks may not create gold, but at least they create money out of nothing. From the time before Greenspan headed the FED comes the following wisdom: "Without the gold standard, there is no way to protect savings from inflationary withdrawal. There is no safe store of value."

Meanwhile, it is not only consumers who have noticed that they are currently facing powerful price inflation affecting all essential expenditures. Mainstream economists are also coming to the realization that inflation of 5.1 percent is a veritable problem (Exxpress reported). What is surprising, at best, is that it has taken so long for Ms. Reinhardt and her colleagues - unlike the representatives of the "Austrian School" who have been criticizing the reckless monetary policy for years - to smell a rat.

What is original about Carmen Reinhardt's criticism of central banks' policies is the accusation that they did not "react" to inflation in time. How were they supposed to "react"? After all, by unrestrainedly inflating the money supply, they were and are the originators of inflation. If they had not given in to the demands of politicians for years to constantly pump new liquidity into the system, the problem would never have arisen. For it is not greedy entrepreneurs, as left-wing Senator Elisabeth Warren of Massachusetts claims, or adverse natural events that are to blame for inflation, but monopolistic money producers who issue legal tender in any quantity desired by governments. For decades, the world's money supply has been growing much faster than goods production.


The father of the "economic miracle" in postwar Germany, Economics Minister Ludwig Erhard, had this to say about it: "Inflation does not come upon us as a curse or a tragic fate; it is always caused by reckless or even criminal policies."

Senator Warren contends that corporations cause inflation because they raise their prices as they see fit to increase their profits. Rarely has a claim been made that is clouded by so little economic understanding. For even leaving aside the fact that competition never sleeps, even the largest multinational corporations would, in the event of arbitrary price increases and all other things being equal (i.e., with an unchanged money supply), be left sitting on large parts of their production, because they would then lack the money to purchase them. Even Koko the gorilla would have understood that Mrs. Warren is attacking the wrong addressees.

Debtors whose liabilities are devalued are the beneficiaries of inflationary monetary policy. Who are the biggest debtors? Not companies or private households, but governments. And who determines - directly or indirectly - the monetary policy course of the central banks? In the case of the USA, England, China or Japan, the respective government. In the case of the EU, the Commission and the EU Parliament. This is proof in the sense of Ludwig Erhard: Politics has a hand in the cradle of inflation.

Two quotes from the former head of the U.S. Federal Reserve, Alan Greenspan, put it in a nutshell: "The United States can pay off all its debts because it can always print money to do so. So there is no likelihood of nonpayment." The alchemists' dream has thus come true: the central banks may not create gold, but at least they create money out of nothing. From the time before Greenspan headed the FED comes the following wisdom: "Without the gold standard, there is no way to protect savings from inflationary withdrawal. There is no safe store of value."

Since 1971, when the last peg of the U.S. dollar to gold was ended, the money supply has increased tremendously on both sides of the Atlantic. However, many contemporaries today are no longer aware that a larger money supply does not lead to greater prosperity. Around the world, the understanding of the value of "real money" seems to have been lost. The grandparents of the baby boomers were still able to describe first-hand to their descendants the hyperinflation they experienced 100 years ago: Monetary assets were destroyed, the middle class was ruined and the way was paved for political totalitarianism. Apparently, no one is interested in that anymore. An expansionary monetary policy cannot be pursued in the long run without negative consequences. This was evident 100 years ago and it is no different today. The first world war was financed with the printing press - with disastrous consequences. Today, against all economic reason, a war is being financed by the printing press - the "Green Deal". The sad consequences will not be missed. Conclusion: Inflation has come to stay.

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






Also: https://mises.org/wire/growing-pile-...tion-here-stay


Grim. Very. I am still stunned that peopel are not afraid, ignore it, are not scared. They have all reason to be. I am worried. Extremely so. My life will get ruined not by a war, climate warming, pandemics or or lack of political wokeness, but by inflation. I dont get it that people do not see it and carry on as if nothing happens and keep on voting the criminals having caused and further causing this, and not revolting against them but even electing them. I dont get it, its completely beyond me.



Die dümmsten Kälber wählen sich ihre Schlachter selber - and lächeln dabei. Maybe they assume its just about getting photographed.

[Skybird]

https://www.spectator.co.uk/article/...about-to-burst

If you believe that central banks are genuinely independent of government, you probably still imagine in middle age that the packages under the Christmas tree when you were a kid were put there by a fat geezer in red felt and not your parents. Keeping interest rates absurdly low while allowing inflation to soar is such a commonplace of monetary deviousness that it has a name: fiscal repression. Heavily indebted governments adore inflation, though politicians will never say so in public; it so magically melts the debt that behind closed doors US Treasury Secretary Janet Yellen must be doing a little dance.
(...)
The US has been enjoying its longest bull market in history. The Dow streaked from a low of about 6,500 in 2009 to a peak of 36,799 this January, thereby multiplying in value by between five and six times in 13 years. Are all these companies making that much more stuff? The S&P’s wonky average price-to-earnings ratio — real earnings per share — suggests not. Surging stock prices have become dislocated from piddling (or sometimes nonexistent) real-world profits.
The FTSE has been dumpier, which may make British investors lucky. American investors have been lulled into imagining that markets only go up. But historical perspective can be bracing. The Dow didn’t recover from its 1929 crash for 25 years. The index also stayed basically flat for another 25 years, between 1960 and 1985. The only bull market comparable to today’s lasted nine years in the 1990s, and didn’t that end in tears.
(...)
The whole reason finance employs the metaphor ‘bubbles’ — lately, ‘superbubbles’ — is that they pop. The splatter is never pretty. The Fed and B of E have facilitated wild government spending of inflationary funny money, while forcing small-scale savers to put their precious assets at risk in unpredictable shares.

[mapuc]

Revealed:
Credit Suisse leak unmasks criminals, fraudsters and corrupt politicians

A massive leak from one of the world’s biggest private banks, Credit Suisse, has exposed the hidden wealth of clients involved in torture, drug trafficking, money laundering, corruption and other serious crimes.

https://www.theguardian.com/news/202...pt-politicians

Markus

[Skybird]

ECB confirms it has found its first functional neuron ever.

The ECB experts say one of them stumbled with his feet over a war somewhere, and fell to the ground and dropped his face deep into the dirt on the floor - and there it was, laid out before his eyes, a single one neuron between all the many dirty sandcorns and dust partciles, and the first ever found in the ECB.

The emergency investigation taskforce of the ECB is already engaged, trying to find out who of the ECB staffers needs one more desperately than the others. Doctors said the neuron is unique and precious, and thus should only be transplanted into the most worthy candidate. Lagarde already said she feels "complete" and were sure she does not need one. But network theoreticists expressed some doubt on her thesis.

https://beta.dw.com/en/ecb-to-accele...ion/a-61085258

[Skybird]

https://www.andreas-unterberger.at/2...bst-beschdigt/


How Europe in the middle of a war damages itself further



The EU has studied the textbook "How to find the absolute worst time to implement a measure that is bad at any time" very carefully. Only this can explain which project has been presented by the EU Commission now, of all times, when Europe's economy is already suffering a huge shock due to the Ukraine war and the sanctions.

Certainly, the EU and its members are innocent of the war. And although the EU has been very cautious about the sanctions, just so as not to harm itself, there are clear consequences: A severe dent for the GDP, explosion of quite a few commodity prices, crash of stock exchange prices, fueling of inflation. All these consequences of war are unavoidable for the EU states.

Totally avoidable, on the other hand, would be the nonsense that the Commission is now planning with the Supply Chain Act. This project will deal an additional heavy blow to the economy, further fuel inflation and drive companies out of Europe. Yet the EU is not backing down from the project - despite its contemporaneity with the consequences of war.

Clearly, Brussels, once home to an economic community, has become the center of an anti-economic community.

For even in normal times, the Supply Chain Act, pursued with great tenacity by the unions and the Greens, would be a shot in its own knee. It creates gigantic bureaucracy. It will force all medium-sized and larger companies to buy in at high cost. They are supposed to monitor and enforce compliance with many social and environmental standards among their upstream, upstream, upstream (etc.) producers, or they will be severely penalized. All competition outside the EU is not subject to this cost-driving regime. It can therefore take market share from European companies if they do not leave the EU themselves.

Of course, a world would be nicer where no low wages are paid, no children work, and everyone has long vacations. But the EU forgets that many third world countries only earn money because their wages are low. It forgets that all this also existed in our country until the 20th century. If Europe wants to prohibit this in Asia and Africa, it will act like the imperialist colonial powers once did and take away jobs and income from the Third World.

So well-intentioned can also mean quite bad in good times.

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

[Skybird]

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!


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!!

[Skybird]

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.

[Skybird]

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)

[Skybird]

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.

[Skybird]

Can the EU do without China's critical metals?

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