Just like Wile E Coyote, the United States and Europe are discovering that their incredibly “clever” plan to punish Russia with draconian economic sanctions is backfiring. And it is backfiring with a vengeance.
Take a look at the U.S. stock market. It has lost almost 1900 points since last Friday–i.e., four straight down days. That is just for starters. Check out these recent headlines:
Deteriorating liquidity in Treasuries points to turbulence across various assets. A Bloomberg liquidity index that measures deviations of yields from their fair value climbed to the highest level since March 2020 this week.
Home Sales Are Declining Due to High Borrowing Costs
Mortgage rates are rising. Home sales are declining. Supply is improving. Here are the latest housing market trends as seen in June 2022. To begin with, the prices are not going to decline in 2022. The various forecasts from experts show that 2022 will remain a sellers’ housing market, and home values are expected to increase on a year-over-year basis.
Now take a look at Europe. Turning into a nightmare that is likely to produce widespread political upheaval. Thanks to the sanctions imposed on Russia, the U.K. and Ireland are getting savaged with shockingly high energy bills amid the ongoing (and worsening) energy crisis.
The U.S. economy faces significant headwinds moving into the fall. Biden and his team will continue to use the lipstick on a pig to paint the situation in the most positive light possible, but that will not solve the supply chain shortages and the continue growth of inflation.
In Europe, things are markedly worse. The UK and Ireland are grappling with soaring energy costs that are forcing many small businesses to shutter their operations:
One such owner is Geraldine Dolan, who owns the Poppyfields cafe in Athlone, Ireland – and was charged nearly €10,000 (US$10,021) for just over two months of energy usage.
The cost of electricity to the Poppyfields cafe for 73 days from early June until the end of August came in at €9,024.70 an increase of 250 per cent in just 12 months. There doesn’t include the €812.22 in VAT, which brought her total bill to €9,836.92.
It has left Geraldine Dolan wondering if she will be able to continue running the business she has owned for the last 16 years as Ireland heads into what is certain to be a winter of rising energy prices and cost of living spikes.
https://www.irishtimes.com/ireland/2022/08/30/athlone-cafe-owner-shocked-after-getting-9000-electricity-bill-things-are-only-going-to-get-worse/
Zerohedge reports that this is not an isolated event:
In short, small businesses are getting utility bills that are 10 times what they were paying a year ago. Most are going to be forced to shutdown operations.
Things are no better in Germany and Slovakia:
Zinc, Aluminum Smelters Shuttered In Europe Due To Soaring Power Prices
“A Structural Rupture” – German Companies Shutting Down In Response To Record Energy Prices
As the FT reports, German manufacturers are halting production in response to the surge in energy prices, a trend the government has described as “alarming”. German economy minister Robert Habeck said industry had worked hard to reduce its gas consumption in recent months, partly by switching to alternative fuels like oil, making its processes more efficient and reducing output. But he amusingly clarified, some companies had also “stopped production altogether” — a development he said was “alarming”.
“It’s not good news,” he said, “because it can mean that the industries in question aren’t just being restructured but are experiencing a rupture — a structural rupture, one that is happening under enormous pressure.”
Habeck said rising gas prices were affecting everyone from big industrial companies to small trading firms and the medium-sized enterprises that make up the “Mittelstand”. “Wherever energy is an important part of the business model, companies are experiencing sheer angst,” he said. And since energy is a crucial part of every business model, one can only imagine the chaos, fear and loathing hammering the largest European economy right now.
Meanwhile, the Russian economy is doing okay. That is because it produces energy and commodities and metals that the world needs. It is not dependent on imports to stay afloat. And, the sanctions notwithstanding, Russia continues to export oil, gas, fertilizer and grains.
The messages from the HBO series Game of Throne and the movie, The Fly, are being repeated in the press–“Winter is Coming” and “Be Afraid, Be Very Afraid.” As winter approaches the European resolve to continue to punish Russia with sanctions will crumble. There will be a rupture between Europe and the United States over policy towards Russia. Unfortunately, the rupture will probably come to late to avoid people in Germany, France and the UK from dealing with unheated homes and dramatic increases in unemployment. We are likely to enter a period of economic chaos and upheaval not seen since the Great Depression of the 1930s. I hope and pray I am wrong. But the indicators are neither promising nor reassuring.
Nah, the response to COVID riots last year shows the EU and UK police forces are up to using extraordinary crowd control measures. The Criminal Elite are nervous, but they just make protesting illegal and figure their henchmen can enforce said laws. Given that the “troublemakers” were perhaps only 10% last year, maybe they do have a grip on the sitch’ … then again, what if not having access to the internet, no lights, and no heat stir the interests of another 25% or so?
Let’s face it … our visionary leaders seem to have no talent for identifying foreseeable developments. They figured we’d all take the death-jabs and go to an early grave.
you forget that chaos is just a few meals away…
What happens when 95-99% of parents do not know how they will feed their child tomorrow?
What will they have to lose then?
Will a smiling creep on tv telling them to calm down and buy a electric car or a few police officers really make a difference?
Exactly.
Medically it’s 9 meals ie 9 days. After a prolonged period of short rations, a starving man will commit murder to feed his family.
It’s that basic.
As to Covid lock downs and the police I have news for everyone.
Talking to a police Sargent in 2008 about a financial crash and riots, l said,” the thin blue line is going to be stretched!”
To which he replied “ They will be one blue dot short because I will be home protecting my property and my family..and I’ve got my own gun.”
So there you have it.. British police will be home protecting their own like every other country. How’s your local Police do’in.?
They know what the shit will do when there is no money for drugs and no Blue on the streets.
Is this why Americans are buying up guns and ammo and Brandon just spends $80 billion on a new , armed to the teeth, Tax Army? (No jabs required LOL.)
The swamp critters know winter is coming and just how bloody cold it’s going to get, or as hot , depending how you look at it.
Biden “jumped the shark” last night with his “all Trump/MAGA voters/supporters are semi-fascist extremists” crack.
His peeps told him, “You can’t go FULL fascist. Just make it semi-fascist, like semi-sweet chocolate.”
Semi-fascist is like being “a little pregnant”.
D’Oh!
us and eu are the new nazis. like biden’s speech props showed.
Aaron
Exactly the same as a police officer told me here…
I am happily reporting to be more ready for trouble then most of my fellow citizens but i fear it is not enough..
Yes, when food and energy shortages come for everyone, they’ll be for everyone including the police and their families, and then…. The Russian revolution started with food riots and the troops sent to suppress them sided with the people.
We have to remember too, that the police also have to heat their homes. I expect that the size of the protests and rioting will be unprecedented and the police will be split. They will then try to fall back on the army. What then?
The oligarchs never next a crisis go unexploited, so watch they buy up the manufacturing base of Europe at pennies on the euros.
Milton Friedman said, ‘Inflation is always and everywhere a monetary phenomenon in the sense that it is and can be produced only by a more rapid increase in the quantity of money than in output…’
Ludwig von Mises:
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.
Wars cost big money — Americans should know that — During the American Revolution, the Continental Congress issued a form of currency known as the “continental” that proved worthless due to rapid depreciation.
My opinion of economists in general is as follows: SOCIOPATH. The plague of liberals and their virus infected neoliberalism, it has ruined the working class economically and morally. His nihilism, arrogance, atheism and shamelessness are extreme. They have ruined the working class of America and the rest of the West.
Oscar: you are replaying to the person who was born in SFRY (The Socialist Federal Republic of Yugoslavia), and today is naturalized citizen of Australia.
If you are American, or from any Western European state — problem is too much socialism or fascism ( Big government ).
before 1913 — you did not have income tax, government was small –and one working man can support average family of five.
taxes were around 5-6%
today taxes are around 30-50% and government is on a level of former USSR.
Leonard E. Read, the founder of the Foundation for Economic Education in 1946, used to say that Americans live in a country in which various levels of government extract over 40% of their productivity, yet they call this system freedom.
“They don’t know the difference between freedom and coercion.”
I used to think this was too simplistic an idea, but I start to believe that Nordstream 2 will come online at a certain point this winter.
When the German people have rioted in strength enough that the police cannot or will not disperse them, and the damage is great enough for the politicians to plead whatever their equivalent of force majeure is, the government will have to ask Russia for gas, because presumably this will be the demand on the street. (Hopefully Russia will still have the ability to divert back to Germany.)
And Brussels will have to let it happen, which is to say that Brussels will have no power to stop it. Nor will the US. And no one in political Germany will care at all about the ramifications of that, because as the German people start to get warm again, a ruthless defiance of anything that threatens such a thing again will set in fast with them. There will be a new, “post-sanctions” polity.
Not making predictions, but noting that the fundamentals begin to support such a possibility. One had no idea the fools in Brussels would really let it come to this scale of a disaster. It will be their disaster, if the people will it.
By this winter, the gas that was originally intended to flow through Nord Stream 2 will have been purchased on contract by one or another Asian country (think Power of Siberia, and in the future, Power of Siberia 2, as an example of a route such gas might take…). Germany is welcome to its dreams and wishes, of course; I just don’t know how those can fuel industry and keep people warm.
They will declare open season on the Greens, but the Green party is nothing more than another pawn of the Davis bunch.
We need to strike the root.
As reported in RT: “Even if Germans take to the streets over energy prices, Berlin must support Ukraine by maintaining anti-Russian sanctions, Foreign Minister Annalena Baerbock told a conference in Prague on Wednesday.”
“If I give the promise to people in Ukraine – ‘We stand with you, as long as you need us’ – then I want to deliver. No matter what my German voters think, but I want to deliver to the people of Ukraine,” Baerbock said at one point.
words fail!
This is not Democracy: “No matter what my German voters think, but I want to deliver to the people of Ukraine,” Baerbock said at one point.
These people are not invincible. The are not that many of them.
Lesson 17 of “Why Did Hermoaneyia Not Without Precedent Become A Cold Blooded Flat Out Totalitarian Dictatorship in the Early 21st Century Too?”
Chapter 1. Werewolves of the Party Green reincarnated Zombies of Teatotaling Vegetarian Twitlairia.
I’ll bet the president of Sri Lanka thought something similar
The paradox is Gazprom is still selling Europe 6cent/kwh Natural Gas and would be pleased to sell beaucoup more at that price, but the Euro leadership wants to buy from the US suppliers at 25 cents/kWh.
They are trying to price gas out of the market. The Davos group thinks they Will use what they think is “the market” to force Schwab’s Great Reset.
Goes to show you how little they understand such things.
Why an entire country bends to the will of a self-selected group of people who have zero record of any substantial accomplishments, a long unbroken record of failure, and have never had a real job in their lives is a mystery.
The German people need to round them all up and stick them in a line of boxcars.
What makes you think Russia would agree to run Nord Stream 2? The stated goal of the sanctions was to destroy Russia. Why would you think they wouldn’t want their revenge? What can Germany offer Russia? Nothing that they need it want! So it’s not going to happen.
The Russians have a sense of humor that escapes many westerners. They delight is selling gas and not selling gas as the mood strikes them.
I was looking at the twitter post from that woman from ‘poppyfields’ cafe (poppy fields? Isn’t that the place that heroin is grown.) I could not help but notice she had in her profile the obligatory virtuous Ukrainian flag. Now I’m not saying that someone who supports the very reason why her utilities bills are so high deserve a huge utility bill. Live by virtue signalling die by virtue signalling. I believe that is the disconnect that every one in Europe is currently suffering from. Cause and effect type of thing, if you support the latest thing don’t be surprised if the latest thing bites you on the back side. That is all I have to say about that.
Good pick up. How ironic!
Sounds about right. Winter is coming.
Who says The Great Reset isn’t real?
The Great Reset was based on the split up of the Russian Federation and the threatening of China (blocking the water ways). The intention was to slowly reduce natural gas/oil until 2030. You know: slowly cooking the frog. This was not their intention – the end of the petrodollar and a free Russia and a strenghtening Iran, for example.
I worry that an energy war is on the horizon. Some evening in the fall of 22 Biden will make a televised address that he has authorized cruise missile strikes and aircraft into Ukraine which, of course, is WW3. An energy crisis caused by the Russians as an attack on NATO.
I have written under the name John Stanton about the maniacal hatred of Russians by US policy makers. It is horrendous and it seems to me that the policies of the USA are based on racism. Nothing historically new there.
I still mourn the absence of General George C Marshall. They don’t exist anymore. Many Americans, including many youngsters in the military services, don’t know him. Damn! He was the boss of Patton’s, Bradley, Vinegar Joe, et al. Eisenhower got his command in Europe cause FDR needed GCM here involved as he was on the Hill, with the Manhattan Project and working with Hap Arnold.
There is a Russian connection here. If you visit his house in Leesburg, VA, you will find a painting given to him by Beria. Yes, that one. Stalin had the greatest respect for Marshall. Alas, no Marshall’s these days to deal foreign policy cards or play chess.
There is a great episode of the Dick Cavett Show with Orson Welles as guest. When Welles was asked who the greatest man he ever met was, he said, General Marshall. It is worth finding that interview on YouTube for the story he tells about Marshall.
Marshall was once asked why he turned down money for book deals, etc, and he said service to my country was enough.
We have to thank to one Fox Conner for those mentioned. For Conner’s lasting legacy was as a role model and inspiration to world war ıı high commanders including Marshall, Eisenhower, and George S. Patton. Eisenhower considered Conner to be the greatest soldier he ever knew, saying: “ın sheer ability and character, he was the outstanding soldier of my time.”
Jeff,
‘on the horizon’? Where have you been.
“An energy crisis caused by the Russians as an attack on NATO.”
Russians ordered the Germans to shut their coal and nuclear plants in favor of “renewables”? Russians did the same in France and the UK and Ireland?
You want us the believe that Russians(!), led by Putin the Great, got all those Europeans to do all that in the name of “climate change”? That’s decidely not the case. Nor is it the case in California or elsewhere.
As a European/Norwegian with a father who fought in the Battle of Atlantic in the Royal Norwegian Navy and Merchant fleet , then served in the army/NATO.. Mr Marshall was very well known for establishing the last mentioned in -49, and God Bless!, due to the safety, peace and stability it provided for Europe during the Cold War!
Lesser known is his achievement saving post war West Germany ( hence Europe) in the years following Hitlers capitulation. The notorious US Treasury secretary Morgenthau had conceived his (diabolic) plan to dismantle all German industries ( probably ship it to US free of charge, I guess learning about his (((reputation))) in DC at that time) and it’s people continue living as a nation of farmers and peasants!!
However, it was General Marshall who torpedoed that plan. Amen!
His office calculated M’s plan would lead to the certain death of 2-4 millions of Germans by starvation!!
In stead he designed his “Marshall Plan”, financing the rebuilding and development of western Europes industries and trade!! (Also Norway was under this lucky “umbrella”!) If Stalin/Eisenhower won the War, Marshall won the Peace in Europe after -45!
reading a lot of twitter feed from people from UK who complained about their energy bill , and these people have ukraine flag on their twitter ID.. i guess they support ukraine and should shut up for their increased bill..
on a funny note , ‘pat lang’ from SST have been caught playing sock puppetry in the comment section of SST. It seem someone forgot to log off the pat lang ID before replying to his previous pat lang post.. I guess it is the same TTG who handled Pat lang ID and posted on my ID pretending there are discussion between many people when theres only 1 people
https://turcopolier.com/as-kyiv-breaks-through-russian-defences-in-kherson/
https://archive.ph/rc8TH
i archived it in case he decide to delete.
good , its been obvious for months that real pat lang already gone to pasture after he sold off his site to the govt. the so called TTG who barely posted on SST suddenly become very active daily during russian SMO and he even posted many of usual pat lang topics like religion , space tech and non military stuff..
anyone who visited SST routinely will definitely noticed the deviation from the usual , as TTG ID become hyperactive posting kiev propaganda while using ‘pat lang’ ID to ban people like larry johnson and patrick armstrong , whose analytical brains can shake the IO operation on SST.
and this is actually the best case for lang , where he turned all SST including his ID to the govt while he never posted again..
the worst case will be that pat lang is also an active accomplice on this charade and for whatever reason supported this insane russophobic propaganda on his site using his name..
Frequent commenter at Turcoplier, “Leith” is also an IO character brought in to support the operation. Leith commented at SST, a few years ago, as “Mike” and the real Col Lang clashed with him and, in fact, banned him. This character re-appeared just as the Russians were preparing to jump off their special military operation. Then Leith became a hyperactive lap dog for TTG and ISW BS. – btw, the real Col Lang had given me guest author privileges that I never used and we were Facebook friends, as I am with some other guest authors and the site admin (most of whom were denied access/kicked off like LJ and Patrick Armstrong on or around Feb 24, 2022) Col Lang dropped his FB account sometime shortly before the 24th.
Before I was ejected from the site, I publicly called Leith out, declaring that he is the same as “mike”. Leith responded and did not deny it at all. To my accusation he merely diverted and stated that he used to be a republican many years ago. Mike/Leith is a hardcore Bernie Sanders type (like TTG) and a worshipper of big govt. and whatever it does.
I suspect “Barbara Ann” is also a deep state bot at this time. She used to be a very smart and highly nuanced commenter with obvious background in intelligence (probably DIA). Now she is a more of a dullard. Maybe the real Barbara Ann was banned or just left in disgust.
Eric, when I search on “Eric Newhill” at the current turcopolier.com site,
I get the following message:
“Nothing Found
Sorry, but nothing matched your search criteria.”
Would you care to opine on what you did or said to result in such an outcome?
I recall that a year or so ago the Colonel criticized you by name, but I do not recall the details.
OTOH, when I search on
“site:turcopolier.com Eric Newhill”
at google.com,
I get lots of hits.
Curious.
KH,
I think google can find cached versions.
I should have added that the last straw before my “adios” was that TTG (or someone) wouldn’t post my comments, which disagreed with theirs concerning Ukraine.
You could tell them not to fret, that Zelenski will be able to afford the power bill in his mansion in Regents Park and also in his Miami beachfront mansion and he he doubt appreciates their support.
KH,
I was commenting there through Feb 2022 (up to a couple or three weeks after the Russian special military operation). Col Lang and I had some mostly friendly spats over USMC v Army over the years, but generally we were in agreement on anything of any significance; or respectful disagreement in some few instances. I think the incident you’re referring to was when I said that Col Lang was an honorable man, but the political leaders that created the policy he had to implement/follow were not. I worded my statement badly and he took it personally. I apologized and he accepted. No problem.
Everything changed after Feb 24, 2022. I know he tersely dropped the site admin.’s access (a friend, a good guy; a loyal guy, VN vet, who practically worshipped Lang). LJ and Patrick Armstrong have spoken for themselves in that regard. Once the disingenuous, passive aggressively belligerent, idiot, TTG, became prominent and Col Lang (or someone using his name) started deriding people who were opposed to putting the world on a total war footing – perhaps destroying it in the process – to kill Russians, as “traitors”, “Russian agents”, etc. I told him and TTG that I thought they were nuts and “adios”. I further told TTG that he – and what he represents – is my enemy and I will fight him and his kind to my last breath. That’s probably when they memory holed me over there.
On April 13, 2022, and subsequently, you were active at two pages, both honchoed by TTG:
https://turcopolier.com/the-cauldron-ttg/ ; four comments from you
https://turcopolier.com/the-moskva-struck-by-ukrainian-missiles-could-be-ttg/ ; seven comments from you, also extensive discussion between you and TTG.
Eventually TTG brought up “Lord Haw Haw”.
This latter page has some interesting general comments on the Ukraine situation
that are interesting even today.
Notably English Outsider said:
On being banned by Turcopolier,
at one time Colonel Lang made a point of doing so publicly,
and even giving his reason for said act.
E.g. Pacifica Advocate was banned several times for advocating, in Colonel Lang’s opinion, Marxism.
Also see his banning of Chuck Light.
https://turcopolier.com/chuck-light/
What happened to you was different,
happening with public notice.
A different style or a different person?
“happening with public notice”
should of course have been
“happening with no public notice”.
KH,
Like I said, I told them “adios” and left them with my final thoughts after they stopped posting my comments; that after calling me Lord Haw Haw and similar disrespects. When I’m wrong and/or stupid I will happily accept redirection, but summarily dismissed by name calling I won’t tolerate.
It looks like I was commenting there longer after Feb 24 than I thought. I can’t keep track of all of the minutia in my life. English Outsider was someone who’s comments I found thoughtful and I always enjoyed the perspective from the UK. Another good one that was either banned or voluntarily left the insanity there.
I really don’t know what happened there. TTG was always as he is now. No surprise with him. Col Lang I’m not sure about. Something snapped in his head over Russia. I think it’s really still him posting with his name. His posts on domestic affairs are consistent with his character and intellect. But the Russia/UKR stuff is really pretty bad; not b/c I disagree with his conclusions. Rather because his conclusions are based on such obviously shoddy nonsense.
He told me something once upon a time that always stuck with me. I didn’t like it because of what it represented. He said that sooner or later all the “smart guys” come around and beg to be told what’s real. In the context of the convo, he meant that spooks can create an environment in which everyone outside the circle are baffled with BS and must rely on the spooks to fill their heads with whatever the spooks want to – and no one is immune. My response was that the government should be serving the people, not creating false realities b/c being in the position of the spook creating the realities is too much power and power corrupts. He merely snorted at that, if memory serves.
To clarify:
TTG did NOT call Eric Newhill “Lord Haw Haw”.
What TTG actually said was
leaving ambiguous about whom he was talking.
KH,
Come on man. Who do you think he was referring to? You know that Lord Haw Haw was tried and executed, don’t you? You don’t see the threat there? Like I said, he’s a passive aggressive, clumsy, idiot. If that is what the intelligence agencies chose to forward their objectives, God help us all.
I thought the Iraq invasion was a conspiracy based on deliberately stove piped intelligence product. People like TTG make me question my understanding. Maybe the whole thing was the result of the “analysis” of sincere belligerent morons.
Great article! Sadly it turns out that America’s few only surviving industries is war. We used
to be the world’s supplier of good, life things. Now we supply the world with death things. The EU are too blind to see that they are just a pawn in the game of war. All of America’s friends are pieces of the war game America plays. Someone said, “An Honest Enemy Is Better Than A False Friend. Pay less attention to what people say and more attention to what they do”. America is good at keeping its Allies distracted from the truth. Now the world can’t afford the basic needs for their families. Maybe Jack Frost this winter will pull the curtain back and we will see the Great OZ!
Recent stories claim that Germany (Europe) is buying Russian gas through China? While Chinas economy slows that’s a good side hustle, but it’s also life extension for the Oaf
The WH is operating on the assumption that central banks (the Fed) can effect inflation upwards or downwards through manipulations of interest rates and the money supply. It is wrong.
After the Great Financial Crisis, the Fed tried to raise inflation to approximately 2 percent through keeping interests rates low and through Quantitative Easing (increasing the money supply via purchases of Treasury Bonds). Neither worked to raise general inflation; they just stoked the stock market and housing bubble.
We are currently in diametrically opposite conditions. But the Fed strategy of Quantitative Tightening through hawkish interest rate hikes will impose a recession and stock market crash.
The problem is that inflation is not determined primarily by the money supply and interest rates. It is determined by supply and demand for goods and services.
While central banks can influence aggregate demand to some extent, they can’t influence supply through monetary policies. Supply is determined by output of goods and services. And that is determined by business investment, which, in turn, is driven by the profitability of that investment. This is a critical point to understand the limits of Fed strategy today.
The current inflationary spiral is mainly due to constrictions on supply, particularly in energy, food and other commodities, as well as global supply chain blockages for many components and products needed to meet demand.
But underlying these immediate causes is the long-term decline in productive investment and labor productivity growth in the major capitalist economies. These never recovered after the Great Financial Crisis, and set the macro context for the explosion of inflation as a result of US and Western sanctions on Russia and pandemic-induced supply chain shortages.
With these proximate and structural issues in mind, we can predict that the Fed and other central banks will accomplish little but sink their economies further by raising the cost of borrowing for investment and consumption.
There is one further dimension to Fed policy, and it relates to class struggle. The Fed is conscious of the class dynamics of its crisis-resolution strategy. Even though wages are not driving the crisis, and are in fact being outstripped by inflation, the Fed is consciously aiming to increase unemployment to make the working class PAY for this crisis. Have no doubt: when it talks about taming demand, it is expecting and hoping for job losses, poverty, hunger, and timidity in wage negotiations.
Here, then, is an explanation for what is happening and what will happen — namely, a real economic slump as well as suffering for many working-class people.
This is brilliant. Yes, for some strange reason, raising the prime rate doesn’t make more oil bubble up out of the ground, or food appear in the supermarkets.
But it can raise unemployment (making all those problems worse!)
When all you’ve got is a hammer….
Yep, exactly.
Except I think the impact goes all the way up to the upper middle class. Most of those people – I know, I’m pretty much one of them and work with them – are leveraged to the hilt; the biggest house they can afford in the best neighborhood, nice vacations, the best cars, the best schools for the children, the newest and best everything (enjoying their financial success and keeping up with the Jones). They don’t save all that much except in 401-Ks which are going down with the markets. The working class is always hit hardest, but the upper middles are going to feel the pain too. Their ultra-comfortable life styles will come to an end. These people can be laid-off too. Management is more expendable than they realize when hard times come to big business.
Me? My Armenian side always moderates my financial behavior and I have a down to earth thrifty wife. I saw this coming when Biden “won” the election. First thing we did a couple years ago we downsized and moved to a region where you don’t freeze to death if the power goes down (I work remotely now). Debt free and money in the bank. I intend to swoop in and buy assets for Pennies on the dollar when the crisis has wreaked its full devastation. I’ll probably be in a bidding war with some damn Chinese nationals and US oligarchs. Should be fun.
What is absolutely mind-boggling and frightening to an extreme is that the consumer inflation occurring now, in 2022, was baked into the cake in 2020 and 2021. The CPI always tends to follow the PPI with a 12-18 month lag. This means 2023 and 2024 are going to be magnitudes worse than what we’re experiencing now. Furthermore, inflation is like a multi-headed hydra; trying to tamp it down in one economic sector results in its reappearance in another sector. Lastly, mass unemployment is a lagging indicator of recession, so expect that dumpster fire to start raging next year. Batten down the hatches.
Amazingly people question why the Russians are “going so slow” in Ukraine or why they haven’t overrun the country already. There is no need. The SMO is against the US and the biggest blow the Americans can suffer is an economically collapsed Europe that turns against the US presence and makes their military bases security risks. The longer this economic collapse goes, the more European Nationalist forces gain adherent’s and strength. They will reject all globalism. The worse this mess gets, the worse the US and NATO look in the eyes of the non-western world and more nations will start pushing back on Anglo hegemony. Who know what another military disaster plus an economic crash will mean in the US itself. Nothing good for sure. No doubt the Russians, Chinese, Iranians and Indians have thought this through. The longer this goes the better for them and all the non-Western countries. They know it. I think the US knows it too but can’t find a way out except WWIII.
Spot on.
When the school bully finally gets dropped, a queue quickly forms, eagerly waiting their turn to put the boot in.
Human nature 101.
Echoing Aaron – Menton’s comment is exactly right and the answer to anyone questioning the pace of the SMO. The effects are subtle, but like the shifting of tectonic plates, there’s an entire strategic geopolitical realignment and recalibration happening that one doesn’t notice with a superficial MIL OPS analysis. What the 2014 Ukrainian coup has wrought is a changing of worlds.
Only themselves to blame. It’s like Democrat cities crying when become crime and corrupted hellholes after Soros funded DA tells you out loud he will let felons loose. Stupid has consequences. West is full of really stupid and insouciant people in general and will probably fall for a whole host of reasons building up:
https://www.washingtontimes.com/news/2022/aug/27/american-civilization-is-being-destroyed-from-with/
These “feel good” anti-Russia (and now China it appears) sanctions are just an accelerator.
Demand Destruction hit one outta the park batting for Team Sanctions.
Purpose of System is What it Does (POSIWID)
Millions of people in Europe will be disconnected for utility bill arears.
It won’t be just cold: it will mean no lights, no refrigerator, no TV, not charging your iPhone, no internet or WiFi.
I read it is a ruse. The US is going to ‘help’ EU and UK in the spring by buying up their shuttered factories and businesses, similar to the Capitalist plunder in 2014 of Ukraines resources just 7 days after the Coup. Cargill, Monsanto, Massey, Chevron, DuPont own about 50% of what will be left after the SMO. (99 year leases) Of course, Cargill will have lost it’s port facility in Odessa by then…. Russia just shut down Northstream 1 again….how long til Northstream 2 gets certified….that’s the Big Question… I’m not sure Russia really cares anymore…they have plenty of other markets for offtake…. who will pay more that the EU contracts. EU has proved to be an un-reliable business partner and they broke their contract terms, which will have to be re-negotiated, with not enough left to go round….selling less oil for more profit…that’s an enviable business proposition and a lot of collective foot-shooting.
Those 99-year leases are only as good as the Russian Federation’s tolerance of such. The RF can simply declare the leases null and void, having been obtained through fraud. What consequences would come from lease cancellation? More sanctions? Please. Yet again, the RF will have escalation dominance.
Europe (and US) clearly and blatently stated that the intention, with their sanctions, was to cripple the Russian economy, precipitate regime change hoping for a piranha-like feeding (theft) of Russia’s vast resources. I don’t think that Russia will easily forgive the amoral WEF cretins running the western circus. They were given red-lines in Dec’21 which they foolishly sneered at, Russia spelt out the consequences…..now US/UK/EU have to live with the ramifications of their inanely stupid actions.
Frankreich ist kaput ! England ist kaput ! die Niederlande ist kaput ! oops!! Deutschland ist auch kaput. Schweinehund!
Couldn’t help it today being Sept. 1
Some readers may not get the connection.
Thanks for the chuckle
A amusing and illuminating financial commentator is Bill Bonner. Ignore his selling of wealth management services, simply read his oft hilarious financial commentary.
https://bonnerprivateresearch.substack.com/
Bonner’s premise is ever since the 2007/8 Financial Crisis we’ve been accelerating into a economic catastrophe.
The illegal sanctions and seizure of assets hastens de-dollarization like-you-wouldn‘t-believe. 85% of the world is quietly exiting all Dollar based investments and trade. Without reserve currency status – Washington might have to pay 5-7% interest on its debt. State and Locals might need to pay 6-9%. If you want to lose sleep at night – calculate the budget implications of those interest costs.
🤯
Eventually, Europeans will get wise. It may take years. But they will get wise. When they do they will hate America. As an English person who took his masters in the US and has spent most of my career at US firms, I am saddened by that. The US at its best is the greatest country on earth. I do think this will be the eventual outcome though.
The politics here will also alter. President Putin was a reaction to the pillaging of Russia by the US and broader west that occurred in the 90s. US pillaging of Europe now will lead to the same effect. The only serious European leader who is wise to all this and cares about it seems to be Viktor Orban. But things change. It is just a question of how much misery and evil is inflicted first by the dying empire.
Anyone who thinks German people will do anything are delusional. The German people have shown time and again that they will follow their leader into the abyss without question. It’s their nature. They are control freaks and follow control freaks. They will not raise a finger. Americans are useless as well, they will never take a stand except on the internet. Brits and Gaels are sheep. If there will be any uprising it will be in the Balkans and that will be crushed by the EU. Our entire society has shown itself to be fatally flawed.
As a German, I must say that you are right. May be 20% are critics – also the ones which saw the new totalitarism raising its head in the last two years – but all the others follow authority and will do what they are told to do and believe what they are told to be the right thing.
One should not forget that in the genetics of the German people is the experience of two totalitarian systems (Nazi Germany and DDR): those who work with the power will flourish and get good pensions afterwards, those who oppose go to jail or camps and will suffer the rest if their live and in their old age.
The bills are paid also by the police officers,. They do nor earn a lot of money. They will realize that it is also in their own interest to support some kind of changes. very interesting days are coming. Thanks Larry for your exceptional work
Thanks Larry .
For keeping the window so wide .
Why are you so confident that there will be a rupture between Europe and the United States over policy towards Russia?
Sure, there will be lots of unhappy voters, but voters don’t matter all that much until there is a general election. It will be a while until there are general elections in France or Germany, etc.
US pressure is successfull in the case of the Ukranian government. Why should it not be successful in the case of European governments?
Good one. Not so clear though whether gas and oil and electricity are really such a problem. The West controls much of the world. If prices rise, that’s only because powerful Western make it so. Profits are already through the roof. It is not Russia that hurts European economies; this is the EU ruler class restructuring the people, the nations, the energies everything. Germany is back to fascism. Just a different form. This time, Germans think supremely about Jews and Marrycans. Russia is probably amazed at this like we are. It is so stupid. Let’s hope that casualties of wokeness in the West and Europe will be less dramatic than casualties in Soviet Union and China during that ideology. People do crazy things when the Germans are involved.
I see the British Government’s doing alright out of high energy prices! Notice the VAT of
£1,675. But of course she will be able to pass that on as higher prices to her rich clientel. In her dreams.
I don’t know whose adding the value to VAT, it’s certainly not Bozo and Truss.
The neo-liberal fantasy had to unravel sometime, looks like, now’s the time.
Meanwhile all the elite oligarchs and their court jesters who have all their money off-shore, Queen Elizabeth included, aren’t paying any tax, so they won’t get what the problem is.
People need to take to the streets now before they are too weak to put up a fight.
And if they are feel a gratuitous urge to break windows, do it in Chelsea, Kensington and Knightsbridge NOT Tower Hamlets, Hackney, Newham or Brent.
I would counsel against this, as it will be just the excuse the elites need to bring out the army. And like all Western “Democracies” over the last few years they have been legislating to do just that as they don’t trust the police. And the Police don’t have the good stuff like HIMARS and hellfire missiles. Yet!!
In Australia; the state Governments are enabled by the Australian Constitution to request the Australian Federal Government to provide the military to put down insurrections viz:
“119. Protection of States from invasion and violence
The Commonwealth shall protect every State against invasion and, on the application of the Executive Government of the State, against domestic violence.”
Note that the Executive Branch of the State, without any oversight of Parliament or the Judiciary can request this and the Federal Government is obliged to comply.
Sadly very, very few Australians know this and if you told them and showed it to them even more sadly they would agree that the right of states to use the armed forces against state citizens would be a good thing. It never occurs to them that they might be the ones on the receiving end.
In fact the Australian Constitution is quite unique in that the ONLY right it provides for the ordinary citizen is the right to trial by jury, and even that can be overturned at appeal; in one case it went to the High Court. The case of a certain Catholic Bishop. They always look after their own. There is no free speech, privacy protection, the right to bear arms or anything a decent constitution should have.
Ahh I hear you say, “what about the state government constitutions”
Sorry no joy there: Hows this for starters:
“3 Laws of England to be applied in the administration
of justice
(1) Subject to the Imperial Acts Application
Act 19222 all laws and statutes in force within the
realm of England on the 25th day of July, 1828
(not being inconsistent with any law now in force)
shall be applied in the administration of justice in
the courts of Victoria, so far as they can be
applied within Victoria.
(2) If any doubt arises as to the application of any
such laws or statutes in Victoria, it shall be lawful
for the Parliament by Act to declare whether such
laws or statutes shall be deemed to extend to
Victoria, and to be in force within Victoria, or to
make and establish such limitations and
modifications of such laws and statutes within
Victoria as may be deemed expedient in that
behalf. ”
It seems that EXPEDIENCY is the order of the day! What a strange word word to use in this context.
Doesn’t this give you a warm wet feeling like you just pissed yourself. Australians are theoretically and practically subject to the machinations of Bozo and Truss even though we are in the global south and about as far from the two fools as you can get without leaving the planet; unless our parliament of venal, incompetent, neo-liberals decides otherwise and does their own thing.
And again no rights for citizens only Rights for the Crown. The only rights mentioned are the rights for judges, politicians et al to be paid. Nothing left for us ordinary people.
As Karl Popper wrote, and I paraphrase, “the problem isn’t HOW to get good people into government, most people who want power are either venal, George Bush or incompetent, George Bush again, the real problem is how do you make the bastards scared of you?”
The rich elites use bribery to get what they want. As we don’t have any money, it looks like it isn’t going to be the carrot we need to use, but that other thing.
Remember Shay’s rebellion? Well they lost the battle, but as I remember, they did win the war.
Hello to everyone,
Writing from Italy…in your opinion, which will be the breaking point that will turn European into more compliant behaviors?
Many thanks,
Larry,
The effects of the sanctions on the availability of natural gas is only one part of the problem. If you want to understand what is happening to the EU energy market beyond what is visible superficially then it would help a great deal to know what the regulatory structure is over there and what the impact was on electric power plant, construction, operation, and decommissioning over the past 20 years. If you want to know what is going to happen to your standard of living in the short term that bill shows part of it by listing, but defining, the rates: Standing Charge, Availability, Day Rate and Night Rate. Better figure out what those mean so you know how badly you’ll get screwed to save ‘Ukraine’, or end global warming, or both. If you are a multimillionaire, don’t worry you’ll still be rich when the middle class gets driven into poverty.
The real hurt in Europe will arrive in a few months. When your energy bill goes from 250 euro’s a month to 1000 euro’s a month, discretionary spending falls of a cliff (or goes negative). While small-businesses may be leading, a much bigger disaster is coming.
For the Great Reset to become a reality…..the current system must collapse…..this is the stated goal of the elites who meet in Davos…..so every action they take is designed to bring about chaos. ……it is all by design and the sooner people realize this…. maybe something can be done….
I guess we’ll have to add “Let them burn furniture” to “Let them eat Cake.”
Glad I live in the States and prepared for a lot of this years ago.
The economic sanctions are certainly a huge issue.
The other giant issue is the risk of nuclear war.
On that subject,
John Mearsheimer has a really excellent piece in the current Foreign Affairs:
Playing With Fire in Ukraine
The Underappreciated Risks of Catastrophic Escalation
https://www.foreignaffairs.com/ukraine/playing-fire-ukraine
You can hear this article being read aloud in a 17-minute video here:
https://youtu.be/lIGg9HnmcaQ
And then you have the German foreign minister Annalena Baerbock saying: “ If I give the promise to people in Ukraine – ‘We stand with you, as long as you need us’ – then I want to deliver. No matter what my German voters think, but I want to deliver to the people of Ukraine,” Baerbock said at one point.” Well….’MY VOTERS’ are clearly of no consequence- a nice way to put it!
https://www.rt.com/news/561934-baerbock-ukraine-voters-sanctions/
“’MY VOTERS’ are clearly of no consequence..”
Of course not, the “lady” apparently owns them ; at least in her imagination.
Ah the ways of “sorceror’s apprentices”.
My take on events is a little different. Since the 15th century England has been the center of the Evil Empire. Let us call them Euro-satanists (E-S.) If you look clearly at events throughout history, it is clear that evil’s raison d’etre is man’s misery, that is all it’s purpose, man’s misery in this life and if you believe, in the hereafter.
The 3 legged stool of misery employed by the E-S, in return for power and wealth, is usury, war and drugs. The agents of this triad of misery are to be found in the Shitty of London.
There mode of operation is Crisis, Reaction and Solution (their solution of course.) The one thing I add to the famous quote “don’t let a good crisis go to waste” is simply “one created by us.”
The silver lining coming out of the pandemic and the colossal amount of misery generated by the E-S, is the utter loss of trust by a huge percentage of the world’s population, in any thing they try to sell. The camouflage is exposed.
The World has begun the fight against the E-S and their minions started bt Russia but especially in the US. The US is saturated by the servants of the E-S and they fear the US constitution and the millions with weapons. The minute, they violate the second amendment, they will build a latent pushback that will culminate into open hostilities. Yes, initially, the sheep will fall in line, but the sheepdogs will not. No amount of oppression can win against a sheep hearder, do you still remember Afghanistan.
The Russians and the Globe’s South have exposed the European-satanists as weak and unhinged. My prediction is Americans will finish the fight and near the end, we Americans will have to liberate England from the Shitty of London, because evidently, the English can’t liberate themselves after 5 centuries. Instead, they would rather bully weaker countries or fans of a visiting soccer team. Am I attacking English manhood? Well, there must be a good reason for the Shitty of London to set up HQ among the English.
Who is the one who owns nothing and owes nothing? A slave. Remember, the E-S’ goal is human misery.
I know you won’t like this statement, (and you may think it stiil ajoke) but a patterned thinker can come to certain conclusions about this crisis. The energy crisis is artificial and political and has taken different forms, albeit similar, and some showing up even before the covid debacle. In 1917 our WEF Prime Minister, Trudeau initiated a law to limit petroleum tanker exports from the West Coast of Canada. So tell me that is a coincidence? Now we have Europe doing the same “limiting” for all of Europe, and I wonder when people are going to wake up to the commonalities here. When seventy percent of restaurants are predicted to close their doors in the UK this winter, how is that any different from a government mandating the shut downs of mainstreet businesses, especially restaurants in the West over what amounts to a plandemic that only killed .2% of the population – and mostly the elderly?
The connections with the WEF are there – just read the Agenda 21 for that group and the dots join up nicely. Those dots are being joined up, but I see it as a race between the damage these captured governments can do, and the populations becoming aware. Recall that Putin turned his back on Globalism. Do you see why now?
FWIW,
L.
So I got censored?
L.
No.
The High Lizard Priests of Elitehood are way ahead of us. They have Peter Zeihan (admittedly informative and intensely numerate). He peddles his seminars and books and videos which by way of demographic “pyramid” charts & c demonstrate that the collapse was going to happen anyway so don’t get your knickers overstressed worrying that the Josefiendiac BuyDem administration did anything untoward. And elite wordsmiths publishing novels which depict a world slowed down to a snail’s pace. I think there’s truth to that, but Larry’s presentation shows there’s much more to the story about indeed.
The economic situation is as grim as it is simple –
1. Record high inflation in NATO countries
2. Record high inflation causing massive increases in essentials like food, housing and energy
3. Upper Middle class on down to lower class must cut back on non-essential expenditures
4. Spending cut backs hurt businesses
5. Hurting businesses leads to unemployment and loss of businesses
6. Higher necessity costs, loss of businesses, unemployment lead to loan defaults
7. Govt raises interest rates to attempt to reduce inflation
8. Higher interest rates leads to even more hurt businesses; especially the housing market, but also any business looking to expand operations, which in turn leads to an increase in points 4, 5 and 6 (a vicious feedback loop)
9. Liberal govt “prints more money” (increases monetary supply) to feed into the UKR war, to bail out banks and to provide relief to the impacted populations
10. Printing more money devalues the dollar, Deutsche Mark, etc. which leads to more inflation and overrides any deflationary effect due to higher interest rates
This would be a tough spot under any circumstances, but the real problem here is that the inflation is being driven by 1. high energy costs created by liberal ideology (Greenies) 2. by the Russian sanctions 3. By China’s “zero covid” policy that is the ostensible reason for their export supply chain bottle necks. So the normal remedies to inflation won’t resolve the inflation.
Result = a lethal combination of massive inflation and recession of global proportions (IMO calling what’s coming a deep recession is a euphemism. It actually be a true depression)
Europe is screwed.
The US could get back on track if we invested in developing domestic manufacturing (instead of Ukraine), improved our education system and we ramped up energy production. There would be pain for the next couple of years, but we’d come out stronger. If …..
Covered everything other than rise in suicide and homicide rates, drug addiction and consequent statistical artifact of decreased life expectancy. Oops, and prostitution, human trafficking, kidnapping (of dogs too in San Francisco – Paris Hilton lost two or three that way last year).
“I woulder sooner move my polo ponies to the training grounds of my last remaining perfect copy of the Taj Mahal, though, than go without my Foster Grant Aviators,” said Joey.
“Honeykins?” “Yes Jilly-Pooh my sweet.” “Don’t forget to pack the Teleprompter lubrication supplements.”
Que barbaridad!!!
Por ese consumo, un comercio en Mexicali BC México pagaría unos 315 dlls por mes y una residencia pagaría menos de 100 dlls.
Aun así todos los sectores pugnan por energía mas barata.
Tengo entendido que solo en Venezuela es mas barata que en México.
Y que la más cara más del doble esta en Uruguay, ya que es un % muy alto de energía verde.
Don’t know if you’re aware of this but Geraldine Dolan wags the blueyellow rag on her profile and has not removed it last I checked (a few hours ago) though being told literally thousands of times on Twitter that she shouldn’t complain since her money is going to the nazi coup regime in Ukraine.
Since we are talking about how things are portrayed,
just want to point out that there is, right now,
a very active discussion of Larry’s work at Wikipedia,
and how Wikipedia should portray it:
https://en.wikipedia.org/wiki/Talk:Larry_C._Johnson#This_Biased,_Partisan_Article_Illustrates_Wikipedia's_Unreliability
That is an entry in the “Talk” page associated with Wikipedia’s primary page for Larry.
What that talk eventually portends for the primary Wikipedia page will take a while to shake out.
They try to achieve “consensus”.