As the European Central Bank (ECB) finally begins to raise rates, Greece is rushing to repay its outstanding debt. The failure to consolidate eurozone debt hurt the southern nation, whose debt spiked due to simple currency conversion. Greece remains the most indebted country in the EU. The country received its third bailout in 2018 and has been struggling to pay off its debt, relying mostly on bonds.
Greece is making its next payout ahead of schedule, as it knows that the amount owed will only rise. Greece is set to repay 2.7 billion euros, according to the finance ministry. However, this is a small piece of what they owe as debts have more than tripled since the start of the year.
As the eurozone is facing an inevitable recession, Brussels is sure to hunt down its debts. Greece has been put in a lose-lose situation as its initial debt spiked after the drachma was converted to the euro. Greece’s debt to GDP has soared since joining the euro. The ratio is expected to reach 186.1% by the end of the year, which is slightly better than 2020 (206.3%) and 2021 (193.3%).
The entire EU Crisis began precisely on schedule on the political pi turning point from the major high in 2007. Precisely on the day of the ECM turning point, April 16, 2010 (2010.29), Greece notified the International Monetary Fund (IMF) that it was on the verge of bankruptcy. The eurozone and IMF provided Greece with a 260 billion euro loan – a small price to pay to prevent the European economy from crashing. Greece repaid the IMF 28 billion between 2010 and 2014. More money was requested a few years later. Fast forward to 2022, and Greece needed an additional 7 billion euros through bond sales. They are simply trying to stay afloat.
Posted originally on the conservative tree house on September 10, 2022
There is a particular historical irony in the timing. On the same day King Charles III ascends the throne, previously Europe’s most isolated from consequence – yet loudest voice in chasing the catastrophic climate change energy policies, the British government is forced to reverse course on years of energy regulations and restrictions.
Britain’s new Prime Minister Liz Truss announced, “a new round of oil and gas licensing will come next week with more than 100 licenses issued. A moratorium on fracking will be lifted and planning permission can be sought where there is local support,” in an urgent emergency effort to lower energy costs for British citizens.
The move comes in combination with a government plan to help citizens and businesses cope with skyrocketing prices for electricity and home heating fuel. The climate change chickens have come home to roost throughout Europe and the British government is urgently trying to head-off the calamitous consequences.
Inside the media announcements of the Truss plan, the biggest concern expressed is how the financial and multinational banking sector (the ESG investment groups) will respond to the government position. After decades of ideological “green” outlooks flowing into the energy industry, the biggest concern expressed in the financial analysis is how a reversal by such a large economic system will reverberate.
The climate change ideology has a stranglehold on the energy sector of the economy, this move by Great Britain would be the most significant push-back in decades. The minority green activists are apoplectic that they may lose control over the majority of opinion. The economics of a reversal in energy policy could reverberate throughout the western alliance, particularly in Europe. It will be interesting to see whether this shift in U.K. policy has ripple effects in the U.S.
LONDON, Sept 8 (Reuters) – Britain’s move to green-light dozens of new oil and gas fields will leave investors and banks with a tough PR job as Britain struggles to shore up its energy security whilst sticking to its climate commitments.
Starting new oil and gas projects runs counter to the world’s shift away from fossil fuels in the fight against global warming and a commitment at last November’s U.N. climate talks to phase down their use.
Yet runaway inflation amid conflict in Ukraine has forced the hand of new British prime minister Liz Truss as Russian President Putin seeks to use energy as a weapon this winter.
Britain will launch a new round of oil and gas licensing next week with more than 100 licenses issued, part of a wider package of measures to tackle the energy crisis announced by Truss on Thursday.
And Britain’s not alone in reassessing its energy strategy. Germany, for example, has been forced to turn back to even dirtier thermal coal to help fuel its power plants and keep the lights on, hampering short-term efforts to rein in climate-damaging carbon emissions.
But for energy companies and the investors, bankers and insurers that finance them, new investment in fossil fuels also presents a challenge given many have made their own pledges to reach net-zero emissions by mid-century.
“This will absolutely hinder companies’ … ability to hit their climate targets,” said Pietro Bertazzi, global director of policy engagement and external affairs at non-profit environmental disclosure platform CDP. (read more)
This is the first crack in the western alliance and the ‘climate change’ agenda of the World Economic Forum as it relates to energy policy and ultimately control over human life within the alliance.
The war in Ukraine was being used as a justification to explain the consequences of European energy policy, particularly rapidly increasing costs for energy and food, but the war in Ukraine was not the cause. The true root cause of the exploding inflation and economic mess was the Build Back Better agenda, and the series of policies dictated from within it, that each nation willingly accepted.
Posted originally on the conservative tree house on September 10, 2022 | Sundance
War is an outcome of ideology and economics, and the latter is perhaps the most powerful weapon. As the harsh reality of Europe’s insufferable decades-long efforts to embrace the virtues of climate change begin to settle in, the reasonable adults in the conversation are able to see how their weakness is being exploited by their adversary.
On Sept 7, the President of the European Commission, Ursula von der Leyen held a press conference in Brussels, announcing five initiatives to contain the expensive EU energy crisis: “The goal is clear. We must cut the revenues of Russia that Putin uses to finance this atrocious war against Ukraine.” {Go Deep}
However, Russian President Vladimir Putin made it very clear that any further efforts to weaken his economy, via western sanctions and interventionist efforts against his economy, would be met with retaliation in the form of cutting off all oil and gas supplies to Europe. It appears the Europeans now understand the nature of their vulnerability.
(Via Reuters) – The EU has dropped plans to cap the price it pays for Russian gas.
Energy ministers from the bloc met Friday (September 9) in Brussels. They scrapped plans for the cap after the idea failed to win broad support.
Member states in central and eastern Europe who still get gas from Russia feared retaliation by Moscow. Russian President Vladimir Putin had said he would cut off supplies altogether if a cap was imposed.
However, ministers did agree to claw back revenues from some power producers and will use the money to curb consumer bills. European energy prices are typically set by gas plants. That leaves generators using nuclear, wind or coal raking in revenue, as their running costs haven’t risen as much or at all.
On Friday, some EU nations also argued in favor of a general cap on all gas imports. However, European energy commissioner Kadri Simson said any such move would be risky:
“The general price cap, including LNG imports, could present a security of supply challenge, because the LNG market is a global market. We are not among the three biggest LNG-importing regions or countries, and there is very strong competition in the LNG market and right now it is very important that we can replace the decreasing Russian volumes with alternative suppliers.”
The EU windfall plan will now be fleshed out in the coming days, with another meeting of energy ministers seen possible later in the month. (read more)
President of the European Commission, Ursula von der Leyen previously announced five initiatives to contain the expensive EU energy crisis: “The goal is clear. We must cut the revenues of Russia that Putin uses to finance this atrocious war against Ukraine. And now our work is paying off. At the start of the war, gas from Russian pipelines accounted for 40% of all imported gas. Today it has dropped to only 9% of our gas imports. These are tough times. But I am convinced that Europeans have the economic strength, the political will and the unity to maintain the upper hand,” she said. The United States and Norway are the primary suppliers of gas to the EU to fill the void.
Commissar von der Leyden’s five initiatives included:
(1) Conservation of electricity through forced and mandated cuts in electricity use. The amount of the cut has yet to be determined but reducing demand through forced curtailment of electricity use is the first approach. [Insert California as an example here in the United States.]
(2) A cap on the profit generated by energy suppliers who use renewable energy like wind and solar. The renewable industry has lower costs, yet they are profiting from the top line increase in delivered electricity. The EU commissar is proposing to confiscate the profits of Green Energy suppliers, direct the funds to the member states and then use those funds to subsidize the energy costs of poorer EU citizens.
(3) A cap on the profits generated by traditional fossil fuel energy suppliers (oil, coal, nuclear, gas electricity generation), and the diversion of those profits following the same formula as above.
(4) Banking support and financial liquidity for smaller regional energy providers who are having short term financial issues as they must pay massive amounts of money for the raw material needed to generate electricity. Essentially, the cost of coal, oil and LNG has skyrocketed, and there is a lag between the time they energy company must pay for the fuel source and the time the customer pays the electricity bill. The inbound fuel costs (new) are so extreme the inbound payments for prior electricity (old) are not covering the cost of the new supplier purchase.
(5) A price cap on Russian natural gas. To accompany the increased import of Norwegian and U.S. gas. This sounds like a bizarro effort to manipulate the market which could backfire. If Russian gas is cheaper than EU market gas, the smart energy providers will purchase the Russian gas.
Number five is now scrapped.
Not a single word about increasing the supply of any traditional energy resource. These EU ideologues -bureaucrats within a system that is not representative of democracy- are so committed to the cult of climate change and renewable energy, they are willing to destroy the EU economy in order to lower demand to the level of their windmills and solar farms. However, it looks like alternate, perhaps even sensible people within the EU, are starting to realize the ‘climate change’ ideologues are the real and present danger.
The deadline for both the Trump Team and DOJ-NSD Team to submit their recommendations for a special master to review the Mar-a-Lago documents is tonight at midnight.
During an interview presented by Newsmax, Harvard Professor Emeritus and legal scholar Alan Dershowitz gives his impression on the appointment itself as well as the background issues surrounding the documents at the heart of the conflict.
Mr. Dershowitz recommends that a former federal judge would be the best candidate for the role of special master and supports the opinion with his viewpoint. WATCH:
Yet another head of the financial system is coming out and warning that a recession is inevitable. Deutsche Bank CEO Christian Sewing echoed the words of BoE’s Governor Andrew Bailey and blamed the coming recession on the war in Ukraine. “We will no longer be able to avert a recession in Germany. Yet we believe that our economy is resilient enough to cope well with this recession — provided the central banks act quickly and decisively now,” Sewing said.
Going a step further, Sewing blamed China along with Russia. “When it comes to dependencies, we also have to face the awkward question of how to deal with China. Its increasing isolation and growing tensions, especially between China and the United States, pose a considerable risk for Germany,” he warned. Around 12% of German imports and 8% of exports come and go from China. Sewing would like to see a declining dependency on China rather than strengthening their relationship.
Neither China nor Russia are to blame for Germany’s situation. Russia was simply a diversion to draw attention away from the collapse of the European economy. Negative interest rates beginning in 2014 wiped out pension funds and proved that the central bank was not thinking long-term. COVID restrictions killed the supply chain, and Germany’s insistance in backing Ukraine eliminated what could have been a lucrative pipeline. Had the pipeline gone through, Europe would not have an energy crisis! Ever since COVID, we have witnessed a rising trend of civil unrest. Politicians have been working hard to create war with Russia deliberately, all cloaked in their real objective of controlling the planet.
When the energy crisis is unavoidable for the average person and the standard of living declines, the politicians will point to Russia and China. The decline began long before Russia lined the border of Ukraine, and China is demonized for simply existing. They would never blame their fiscal mismanagement or detrimental policies for the undoable damage they have created. If Germany falls, all of Europe will follow.
Posted originally on the conservative tree house on September 8, 2022 | Sundance
Energy inflation continues to pummel all western nations as they chase the climate change agenda. Today, the European Central Bank has raised interest rates to support the goal of lowered economic activity. Lowering economic activity lowers energy use.
Absent of any desire to raise energy supply and/or energy production, monetary policy can support the goal of lowering energy use by driving down all economic activity.
In the big transition picture, the economies within the western alliance must be reduced until they match the energy output of windmills and solar farms.
FRANKFURT—The European Central Bank raised interest rates by the largest amount since the early days of Europe’s currency union, moving aggressively to combat record inflation even as an energy crisis puts Europe on the brink of recession.
The bank said in a statement that it would increase its key rate to 0.75% from zero—its second hike this year following a 50-basis-point rise in July—and signaled that further rises were likely over the coming months.
At a news conference, ECB President Christine Lagarde warned that inflation was spreading beyond energy to a range of products. She said the ECB was ready to increase rates aggressively over the next several meetings.
“We want all economic actors to understand that the ECB is serious” about combating high inflation, Ms. Lagarde said. (read more)
A few months ago, amid all of the headline warnings about inflation and prices of essential products, CTH noted that if we were to continue waiting about six months, we would see a massive backlog of unsold goods and as a consequence the prices of non-essential durable goods would begin a rapid decline. That exact scenario is unfolding. Keep watching.
Keep in mind, this is not necessarily a collapse of total global economic activity; what we are seeing is a collapse of western nation economic activity that is impacting the rest of the world. A great economic fracturing is taking place as the western nations intentionally shrink their economy. The supplier nations are feeling the consequences.
All of this economic turmoil is running on an identical track -on a global basis- because the entire western plan was coordinated and followed. What we are seeing right now is the outcome of the “Build Back Better” roadmap. The “global inflation” is the outcome.
Joe Biden is blocking domestic energy production as he follows through with the agenda of the Green New Deal. In Europe, not coincidentally demanded by Biden, a similar outcome comes from the sanctions and blocking of Russian energy resources.
One could make a reasonable argument that the team behind Joe Biden specifically wanted the EU sanctions against Russia, because the U.S. crew wanted to keep both industrial economies mirroring each other as the U.S. energy system was dismantled. It would make sense to avoid a spotlight on the U.S. economic collapse, by forcibly pushing the EU economy into the same situation.
Taking that line of geopolitical and economic consequence one step further, and that would be part of the strategy -albeit undiscussed- behind having a consistent global cap on the price that any nation could pay for Russian oil. That approach is not about punishing Russia, it is to make all of the economic pain and problems equal amid all western nations. Globalists, and the central bankers, are good at creating economic systems to deliver equitable misery.
The Bank of England has admitted defeat, admitting they cannot prevent a recession. The pound fell to the lowest level against the USD on Wednesday afternoon after declining 0.64% to $1.145. When asked if the central bank could prevent the next recession, Governor Andrew Bailey was blunt in his answer. “Insofar as the war is having this huge effect, the answer to that would be no.”
I touched more on the decline and fall of Britain on the private blog last week. Socrates agrees with Bailey’s pessimistic stance. Inflation has surpassed 10% in the UK, and food and energy costs are expected to rise continually. The Bank of England now projects that the economy will shrink during Q4 2022, and the decline will continue until the end of 2023. Our models state that the decline will last longer than they expect.
If the new PM Truss is any indication of where policy is heading, Britain is in big trouble. Central banks do not like to admit defeat either. Look how Powell carefully changed his stance over the course of the year in terms of inflation. He did not want to create a panic by telling the public that they were screwed. The BoE has no other choice but to be brutally honest. The heads of central banks are now coming forward to offer their condolences for an issue they helped to create with artificially low rates. The BoE is still in better shape than the ECB, but that is not saying much.
Posted originally on the conservative tree house on September 7, 2022 | Sundance
According to the U.S. Energy Information Association (IEA), U.S. storage of Liquified Natural Gas (LNG) is 12% below the five-year average (LINK). Additionally, the IEA is expecting the U.S. to export 11.7 billion cubic feet of LNG per day during the fourth quarter of 2022 — up 17% from the third quarter. The destination of that export is Europe.
Consider that 43% of U.S. households use LNG for home heating, and power suppliers use LNG to create electricity. With the massive 2022 exports of LNG to Europe (+17% in fourth quarter alone), that means lower domestic supplies and increased prices here in the United States for electricity and home heating. We are seeing and feeling these massive price increases right now. As a result, consider this reality….
Not only are U.S. taxpayers directly paying for the majority of costs in Ukraine, but we are also subsidizing the European Union by exporting LNG and driving up the price here at home.
We are directly paying Ukraine, and indirectly paying Europe to maintain gas sanctions against Russia. This is the reality of the current situation as created by the Biden administration.
Now, consider this. The President of the European Commission, Ursula von der Leyen held a press conference in Brussels today, announcing five initiatives to contain the expensive EU energy crisis: “The goal is clear. We must cut the revenues of Russia that Putin uses to finance this atrocious war against Ukraine. And now our work is paying off. At the start of the war, gas from Russian pipelines accounted for 40% of all imported gas. Today it has dropped to only 9% of our gas imports. These are tough times. But I am convinced that Europeans have the economic strength, the political will and the unity to maintain the upper hand,” she said. The United States and Norway are the primary suppliers of gas to the EU to fill the void.
Commissar von der Leyden’s five initiatives include:
(1) Conservation of electricity through forced and mandated cuts in electricity use. The amount of the cut has yet to be determined but reducing demand through forced curtailment of electricity use is the first approach. [Insert California as an example here in the United States.]
(2) A cap on the profit generated by energy suppliers who use renewable energy like wind and solar. The renewable industry has lower costs, yet they are profiting from the top line increase in delivered electricity. The EU commissar is proposing to confiscate the profits of Green Energy suppliers, direct the funds to the member states and then use those funds to subsidize the energy costs of poorer EU citizens.
(3) A cap on the profits generated by traditional fossil fuel energy suppliers (oil, coal, nuclear, gas electricity generation), and the diversion of those profits following the same formula as above.
(4) Banking support and financial liquidity for smaller regional energy providers who are having short term financial issues as they must pay massive amounts of money for the raw material needed to generate electricity. Essentially, the cost of coal, oil and LNG has skyrocketed, and there is a lag between the time they energy company must pay for the fuel source and the time the customer pays the electricity bill. The inbound fuel costs (new) are so extreme the inbound payments for prior electricity (old) are not covering the cost of the new supplier purchase.
(5) A price cap on Russian natural gas. To accompany the increased import of Norwegian and U.S. gas. This sounds like a bizarro effort to manipulate the market which could backfire. If Russian gas is cheaper than EU market gas, the smart energy providers will purchase the Russian gas.
Not a single word about increasing the supply of any traditional energy resource. These ideologues are so committed to the cult of climate change and renewable energy, they are intent on destroying the economy in order to lower demand to the level of their windmills and solar farms. This is madness, absolute madness.
Posted originally on the conservative tree house on September 7, 2022 | Sundance
German Minister of Economics Robert Habeck is under fire after his comments during an interview with an ARD broadcaster on Tuesday evening.
The conversation surrounded the astronomical rise in the price of energy taking all the income away from people who would purchase other goods and services. As Germans no longer can afford purchases, the stores and businesses can no longer operate. Minister Habeck was asked if that means a wave of bankruptcies and business closures are forecast.
Mr. Habeck responded that businesses can stop operating, but that doesn’t mean they will go insolvent. Just because the business loses most or all of their revenue, doesn’t mean they will go bankrupt. That doesn’t make sense, Minister Habeck was pressed to apply commonsense. If businesses close to save money, workers are not employed. If workers are not employed people do not earn income. If people do not earn income, the economy worsens.
Habeck had no response other than an economically detached “Green Party” perspective that businesses will not go bankrupt just because they are not operating. However, his facial expressions reflect that he knows what comes next, total economic collapse. WATCH:
(Reuters) – German Economy Minister Robert Habeck faced a backlash on Wednesday for saying he could imagine parts of the economy stopping production due to rising energy prices that German firms say are threatening their existence.
Asked whether he expected a wave of insolvencies at the end of this winter due to companies’ rising energy bills, Habeck said “No, I don’t. I can imagine that certain industries will simply stop producing for the time being.”
The answer, in an interview with ARD broadcaster on Tuesday evening, sparked criticism of the minister in charge of Europe’s biggest economy, with mass-selling Bild newspaper saying Habeck “has no idea about the economy.”
Friedrich Merz, the conservative opposition leader, also took the opportunity to criticize Habeck, Germany’s second most popular politician, saying he and his ruling coalition were not taking energy and economy questions seriously.
“One could see how helpless Mr. Habeck you are with these questions last night on German television,” Merz told the lower house of parliament.
Habeck’s comments come as economists and industry groups warn that rising energy prices are a growing risk for Germany’s medium and small-sized businesses, which form the backbone of the economy. (read more)
Things are about to get very spicy in Germany as the reality of the unsustainable Build Back Better agenda starts to sink in. The intellectual disconnect from an economic minister to the consequences of an energy policy removing trillions of dollars from the economy is stunning.
The pro-war People’s Deputies of Ukraine Party are using Western funding to line their pockets. It has been reported that the average paycheck went from 28,800 to 49,600 hryvnia, and taxpayers in other countries will pay for their raises.
This news came out shortly after CBS attempted to release a documentary that claimed weapon shipments from the US were frequently missing. CBS was forced to redact parts of the documentary, “Arming Ukraine,” after Ukraine’s government threatened them. The first report stated that 70% of the weapon purchases had gone missing, while another piece said only 30% of aid had arrived. “Since that time, Ohman says delivery has improved,” CBS backtracked. “We are updating our documentary to reflect this new information and air at a later date.”
“The weapons are stolen, the humanitarian aid is stolen, and we have no idea where the billions sent to this country have gone,” an anonymous veteran originally told reporters. He went on to claim that soldiers are receiving less pay while those at the top are lining their pockets. Zelensky continually claims that his country needs endless funds for the endless war. Where is this money going? Since WE are paying for the war, we deserve to know the truth.
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