Armstrong Economics Blog/International News Re-Posted Sep 28, 2022 by Martin Armstrong
The world is entering a crisis in confidence. First we had the COVID manufactured crisis, that spawned the Energy Crisis, and now we are entering the Currency Crisis phase. As I have said, we have the worst possible of incompetent world leaders I have ever witnesses in my life. With all the talking heads on TV, we must understand that the best risk management is still based upon personal views and expectations. That is highly dangerous for the period into 2032, nobody is qualified to forecast the future from a personal perspective. You can only forecast what you even think is possible.
The UK Gilts have collapsed by 1% sparking the BOE to intervene. The fools on the hill may cheer, but they have never looked behind that curtain even once. Those in the central banks are trapped with old theories spouted out by the goldbugs to no avail – debt rising, printing of money = buy gold. People like Larry Summers wants higher taxes, higher interest rates, and less government spending and all those things that he and others point to as the problem in the UK that would lead to the further destruction of the world economy. Everything is says about the UK is applicable just about everywhere else. Why is the dollar rising with the same conditions? What is the difference? Could it just be the fact that they are all pushing hatred at Russians in general and itching for war using the Ukrainian people for political purposes? That equals strong dollar, capital flight to America, and the end of Europe.
The operator of NordStream 2 reported a sudden drop in pressure on Monday suggesting a possible leak reporting a drop in pressure for Nordstream 1 a few hours later. Danish armed forced reported bubbles creating a disturbance roughly 1 km in diameter in the Baltic Sea. While everyone acknowledges the probability of sabotage and many are pointing the finger at Russia promising to respond, following Swedish seismic monitoring suggests they there were explosions implying an intentional attack. The risk of climate zealots behind this event cannot be ruled out. Nobody in the mainstream press will even dare to question the validity of climate change claims so there is no hope of even causing anyone in government to rethink this scenario.
Nordstream 2 certification was canceled by Germany on February 22, 2022 to the cheers of the climate zealots and subsequently filed for bankruptcy whereas Nordstream 1 has been out of commission since the end of August due to oil leaks of the gas compression unit in Russia found during routine maintenance whose repair has been complicated by the economic sanctions. Moscow is demanding documentation to confirm the turbine is not subject to Western sanctions whereas Siemen’s CEO suggests the company is ready to return the turbine to Russia.
Cheer up – We have entered the era of Volatility. That is the byproduct of a collapse in confidence.