By Jorge Vilches for the Saker Blog
Ursula von der Leyen
Cognitive scientists would concur in that the current performance of European leadership could be diagnosed as either myopic ignorance or — most probably — full intellectual blindness. In the case of so far happy-go-lucky Ursula von der Leyen there is no doubt it´d be the latter… but only if we first dismiss her warm on-the-record support for Bundeswehr colonial policies and military involvement… plus her praise of Third Reich famous general Field Marshall Erwin Rommel, Commander of the Führer Headquarters. But leaving that possible Nazi whiff aside, full ´intellectual blockage´ is the only kind way to dare explain a most strategic project as foolish and doomed to fail as banning Russian oil sales worldwide. Why so you may ask ? Ref #1 https://www.wsws.org/en/articles/2017/06/20/vond-j20.html
The short answer is massive — ´Russian´ massive – unmitigated “asymmetrical non-military retaliation” through surgical and divisive optional sales of natural gas – and other key commodities – just leaving EU sanctioned Russian oil for sale to and re-sale by third parties. And, oh yes, weaponization is not limited to any particular means as various European war schools should have internalized already. War means war and pretty much anything is fair game. But apparently, it´d be as if through the centuries, uppity European leaders – most especially German, French, Swedish, British and Poles — have not learned a single thing despite the über-high costs already paid for by their nations large-caliber warfare experiences most especially with Russia. By the way, the UK also has the additional ( unsolvable? ) burden of its current Brexit ballast… Ref # 2 https://www.zerohedge.com/energy/eu-proposes-ban-russian-oil-imports
May I call you Ursula ? Thank you. “We will make sure that we phase out Russian oil in an orderly fashion [… a phenomenal bad joke of sorts… ] in a way that allows us and our partners to secure alternative supply routes and minimises the impact on global markets” you said. Question: will the Russians just idly watch you trying to execute such enormity at the EU´s preferred speed and political and geopolitical sequencing? And the Russians would never dare to strike back with natural gas or other restrictions no? For starters, what about nickel, uranium, and lithium? Not having them would be like trying to prepare tasty food without salt, pepper or mustard. Without uranium no nuclear power is possible, did you know? [ more on that later ]. Ursula, your pink unicorn wishful thinking is unfathomable gal.
This mad-ban requires EU approval with conditional support from Hungary, Greece, and others. So some special EU members will be exempted while regular EU ´kelpers´ will not. Now could that lead to serious friction ? How many years will it take all of Europe to reconvert its industry and supply chains? “This is why we will phase out Russian supply of crude oil within 6 months and refined products by the end of the year.” Okay, so Aunty Ursie you believe the Russians are dumb enough to let you phase this idea out nice and easy at your own pace and whenever you decide to act per your own special EU schedule. No market dynamics involved as Europe plays everybody else´s pieces too as grandpas would do with 3-year-old grandkids. Ref # 3 https://www.rt.com/business/555065-russia-oil-ban-exemption-eu/
No way Ursula, the Russians play world-class professional chess while you play elementary school checkers, not even being good at that either. The instant Russia perceives the initial execution of your game plan regarding banning of Russian oil, they´ll make their moves, not yours. And those Russian moves will not be nice and pretty. For one, Europe will not have anywhere nearly ready its own diesel refining capacity by the end of 2022 while the middle distillate market is ever much tighter everywhere as demand recovers from the Covid pandemic. So the EU “plan” is
to frantically search for hard-to-find or simply non-existent substitutes while investing tons of time, money, effort and risk. Well, the Russians know that already even before you start. Diesel is already in critically short supply in the EU.
Furthermore, Europe will continue buying Russian oil and distillates via third countries once it introduces any embargo only that at much higher prices than today. Such old, quick and dirty business is known as “triangulation” Ursula.
The existential threat imposed on Russia by the EU with its macabre “Ukraine Plan” and sanctions has not left Russia any way out other than playing hardball for keeps. Furthermore, the Russian non-military retaliation domain is actually unlimited due to the full-scale and open-ended addiction that Europe has developed for Russian imports of different sorts including commodities of any and every imaginable type. Without such, Europe will cease to exist as we know it in a matter of a very few months, if not weeks. As Francis Fukuyama should posit, Europe´s dependency on Russian commodities is the end of its own history. The unipolar world is dying, admit it Frank. Hint: write a new book guy.
Ref # 4 https://www.zerohedge.com/energy/trump-was-right-putins-gas-strategy-gives-germany-only-bad-worse-choices
Ref # 5 https://www.rt.com/business/554968-moscow-toughens-response-western-sanction
not your dog
It seems that Ursula von der Leyden has convinced the EU that feeding a refinery or a chemical plant is pretty much like feeding your dog. But nothing can be further from the truth. Chemical plants and refineries are very closely matched and subtly calibrated to very specific supply feeds very difficult to substitute. Changes can and have been made, but it requires lots of time, effort, money, dedicated facilities, experimentation, specific expertise, risk, and most important fixed, unchanging feeds always complying with specs. This means that Russia today supplies Europe with exclusive unreplaceable oil & gas grades of very specific chemical content (even coal grades) that would be impossible to get from third parties fast enough and cheap enough. So it´s a very delicate and tight matching already achieved between European facilities and Russian fuels and other inputs that cannot be altered or replaced that easily, let alone all at the same time !! Are EU countries aware of all this ? Ref #6 https://www.ifo.de/en/node/69417
So maybe after investing years, money, expertise, trials & errors, risk and lots of hard work Europe may possibly and eventually be able to partially switch from current to dirtier or far more inefficient options. But that would be (a) against the EU´s Green Deal compliance and (b) a very short-term non-sustainable “solution” (c) against the whole world.
So how can Europe transition to a 0% Russian supplies end-point as swiftly and safely as Chinese plate spinners? Ref # 7 https://www.rt.com/business/555087-energy-warning-russia-sanctions/
No minimally informed no-nonsense mindset has thought out the foolish idea of coordinating the whole European continent in this self-destructive mission. Taking matters to an extreme, let´s assume that Europe completely weans itself – or is cut off — from Russian oil & gas imports tomorrow morning and everything else sourced in Russia. In that hypothetical case, Moscow may feel the financial problem possibly within 6 months… or maybe never. But if such event were to happen, the timing would be quite different as the EU would necessarily start imploding in 6 days and would achieve full implosion in 6 weeks. With the oil mad-ban Europe would badly need to find substitutes for Russian imports. The problem is such need cannot ever be satisfied fast enough and right enough no matter how it is diced or sliced. Triangulation means Europe will buy quality Russian imports via third countries only that at much higher prices
plug & play (not)
No, it is not anywhere near “plug & play” either. No. Several EU landlocked countries can only import nat-gas thru existing Russian pipeline unless a nightmarish and highly risky sea-land supply lines are established by different means going across complicated mountain ranges sometimes, a project which no one wants to entertain. Replacing Russian feeds & supply lines is an incommensurable task that Russia will not help out with either. Once Russia withstands the “ban Russian oil” idea, Europe will find itself in the worse of both worlds not being able to rewind back.
Also, the impact of the Russian reaction may most probably result to be disproportionate to the damage inflicted by an EU worldwide ban on Russian oil. Hence, ´asymmetrical´, simply because an exact ´tit-for-tat´ result is impossible to calculate for and let alone effectively achieve. If ever implemented, the unintended consequences of a haphazard decision such as proposed will necessarily mean for the EU either to (1) instantly back-pedal to square one or (2) finally suicidal Europe would follow through and achieve its goal. I kid you not. Other commodities could be included.
And food for thought, as Europe would face famine in-its-face if grains from Ukraine, Belarus, Russia and elsewhere are tied up or absent by Russian retaliation or impossibility to deliver. And the lack of cheap diesel and natural gas from Russia means that farmers everywhere face sharply increased costs, whereby fertilizer is either not available at all, or too expensive to use, and thus crop yields will fall worldwide increasing the price of food products. Greenhouse producers in many parts of Europe have already shut down over high energy costs as prices stand today, not even thinking of the possibility of having Russian oil banned worldwide. Banning Russian oil from Europe can only back-fire.
Ref # 8 https://www.zerohedge.com/commodities/worlds-largest-fertilizer-company-warns-crop-nutrient-disruptions-through-2023
It´s impossible to approach all aspects involved at once, so let´s briefly touch upon part of Russia´s bargaining power.
- Russia does not want, let alone need, to defeat all of Europe. Just turning Germany — or Poland for that matter — into a messy mess would be more than enough for the whole EU to focus and reason out basic stuff.
- No uranium from Russia means the 3 remaining German nuclear power stations cannot be re-commissioned. Not having already scheduled substitute delivery of finely-tuned Russian uranium means an adaptive retro-fit with newly-sourced feed, which technically is risky and mission almost impossible which would take years.
- China + India + Brazil have ´free-patent-IP´ investments plans in Russia kicking off an entirely new ball game
- 60% of German gas consumption is Russian. Today German industry would not survive without Russian gas.
- A partial or total reduction of Russian nat-gas and coal supply in retaliation for banning Russian oil would negatively and instantly impact Europe in many ways and the rest of the world with irregular market dynamics.
- If not delivered to the EU, the Russian nat-gas can be vented or flared at well-heads as there is plenty more.
- Russian oil can be sold elsewhere and/or stockpiled relatively rapidly and easily, or production can be slowed down without damaging reservoirs or wells. Russia will actually increase its “drill baby drill” policy.
- Paraphrasing former US Secretary of Treasury John Connally “Sorry, Russian commodities, your problem”
- Russia´s market is 85% of the world population largely under growth and just as fed up with the US-dollar reserve currency system. The EU trade embargo on Russia does not work per parallel imports from 3rd parties
- The defiant Russian economy is doing just fine, the Ruble is as strong as ever. US President Biden vowed “to make sure the pain of our sanctions hits the Russian economy, not ours” as if he were getting the picture…
- China and others definitely back Russia while the rest of the world de-dollarizes and does not sanction Russia
- There are $ 500 billion worth of physical Western assets in Russia that can be confiscated at any time.
Ref # 9 https://www.rt.com/business/555076-moscow-allows-foreign-goods/
Ref # 10 https://www.rt.com/business/553038-russia-lifts-ban-parallel-imports/
Ref # 11 https://www.newyorker.com/news/daily-comment/russia-and-china-unveil-a-pact-against-america-and-the-west
Ref # 12 https://www.lexology.com/library/detail.aspx?g=39ef25c3-1bf0-4029-bac2-de0ac11965da
Ref # 13 https://www.rt.com/business/555097-russia-sanctions-recession-economist/
Ref # 14 https://www.rt.com/business/555119-russia-india-oil-sales-increase/
eyes wide shut
Agreed, it´s a multi-variable environment in a context of constant change with plenty of moving parts interacting on each other. But, for starters, no ( or less) Russian nat-gas and no Russian oil means many unsolvable things for the EU today. We´d also need to add the impact of having no oil, coal, or gas substitutes fast enough in large enough quantities. All of that put together means no (or less) refined products, no intermediate distillates, no heavy-duty machinery (think mining) no nickel nor aluminum, cobalt or lead or magnesium, no neon, no grains or edibles at large, wheat, corn, barley, rye, soybeans, timber, paper, titanium, rocket engines, nitrogen fertilizer, crop nutrients, potash, less petrochemicals, iron ore, minerals and rare-earths, uranium for nuclear power plants, lithium for batteries, no inputs for production of metals, plastics, fabrics, pharmaceuticals, fertilizer, chemicals, etc., no manganese, chromium, platinum, essential palladium for catalytic converters, copper, tin, mica, wolfram, bismuth, kaolin, talcum, tungsten, diamonds, phosphates, sulphur… and even no gold. By the way, as we should all know, none of these can be printed.
By the way, fewer distillates such as diesel and fuel oil means that private and public transportation and freight would slow down lots, also affecting heavy-duty vehicles, industrial machinery, and airplane travel. Also far lower tourism. So might as well shut down the EU and go away on vacation to beautiful Russia right? You won´t find that much food or heating or A/C either, just new massive unheard of migrations all around you. With less Russian imports, very huge German industrial giants run the certainly serious risk of shutting down otherwise continuous year-round processes which cannot be re-started and would mean irreparable harm & negative impact on the German economy and the rest of the world. And it’s not only Russian produce that would be missing. Also from Belarus and Ukraine itself + the Stans
Only mediocre light-brained European leadership can propose such suicidal move 100% guaranteed to blowback in-their-face much harder and faster than their original strike. It´d be like poking a bear ( sound familiar ? ) with a sharply pointed pole and pretending the beast to continue munching fish unbothered by the aggression itself and the presence of the aggressor, both. Not even young unexperienced teen-aged urban Canadians would think of doing such a thing. Of course, they would know that the bear will necessarily focus attention first ( already done that… ) then would rise on his hind legs and swing his sharp deadly paw wide and fast sooner than the EU can react to what just happened.
It isn´t European David vs. Russian Goliath either. It´s a well-fed and rested Russian Goliath with hypersonic weapons under his arm vs. a worn-out underweight European David with a worn-down sling and lots of very small stones…
to “Schwedt” or not to “Schwedt”
Schwedt is a key refinery for which the German government better find fast good & reliable sources of substitute Russian oil. If Schwedt does not deliver as usual, problems will be felt throughout Germany, Poland, and elsewhere.
But one problem is that Schwedt is majority-owned by Rosneft, the Russian state oil company which has control.
Now supposedly Schwedt has already dramatically reduced its dependence on Russian oil. But there´s a rub.
The rub is that EU member countries are very good at data laundering practices since inception of EU membership acceptance proceedings. Don´t trust me, ask Goldman Sachs they should know. So, for example, if imported Russian oil stays stationary in an EU depot for a couple of months it is “nationalized” and it is no longer considered to be ´Russian´. Also, the official oil inflow figures cheat, as for partial mixtures of Russian oil 45%+ 55% ´oil from somewhere else´ it is considered to be non-Russian, see? So Russian oil import substitution is a topic not yet anywhere close to being solved. And if Russian oil is banned right here, well Russians might deny delivery of either Russian oil or Russian gas – or whatever — over there. They defend their interests, not the EU´s. Ref # 15 https://www.rt.com/business/555059-europe-needs-russian-gas/ Ref # 16 https://www.rt.com/business/555022-germany-petrol-shortages-russia-oil/
two to tango
Which brings us to the fact that the EU cannot dream of moving its pieces in a vacuum as if the Russian enemy were not there also playing in the same theater scenarios and moving its pieces alternatively. The instant the EU makes any headway whatsoever regarding the possible banning of Russian oil, then Russia will respond in kind or possibly before so as to carry out a pre-emptive deterrence sort of like a taste of things to come such as in Poland and Bulgaria
“We have every right to take a matching decision and impose an embargo on gas pumping through the [existing] Nord Stream 1 gas pipeline. So firstly, Russia may reduce or cut off its gas exports if the West goes ahead with a ban on Russian oil”. Understand? The EU attacks Russian oil and Russia counter-attacks reducing or cutting off Russian natural gas, etc. In other words, asymmetric non-military retaliation. Ref # 17 https://www.bbc.com/news/58888451
If the Russian oil ban attempt goes ahead, agreed that the first thing that Russia may do is reduce or cut off nat-gas supplies – or other key commodities — with the stroke of a keyboard.. And it would be impossible to find replacements for Russian oils fast enough also. It would take years of adaptation and readjustments and it will still be much more expensive for European consumers. Russian Deputy Prime Minister Alexander Novak left on record that a “rejection of Russian oil would lead to catastrophic consequences for the global market causing oil prices to more than double to $300 a barrel”…possibly up to $ 500 pundits say assertively in specialized blogs. Be it $300 or $500 does the EU actually want that ? And Russia would end up earning much more by exporting far less. Trust US Treasury Secretary Janet Yellen, she said it, not me. And the higher the price, the higher the inflationary pressure and the higher the prices at the supermarkets already at approx. 35% p.a.. I can´t believe having to explain all this, really…
Ref # 18 https://www.bbc.com/news/business-60656673
Despite sanctions, Russia has almost doubled its monthly earnings from selling fossil fuels to the EU, according to the Centre for Research on Energy and Clean Air. The EU has imported about $23 billion dollars of fossil fuels per month from Russia since March 2022 as oil and gas prices have soared, compared with an average of about $ 12 billion in 2021. Meanwhile, transfers of oil between tankers have surged as buyers take advantage of discounted Russian crude. Different crude blends shipped from Russia may also contain oil from elsewhere which would also be affected.
logistics & freight
Banning Russian oil also means a logistics major reversal from-East-to-West to from-South-to-North. Such cardinal change is costly and risky. New shipping freighters are unprepared for unknown delivery schedules and product specs. Ports and oceans are different, shipping lanes are different, climate is different, seasonal availability of product and ship size and type are also different. That also involves lots of negotiating time, coordination, money, expertise, risk, permanent costs, and new dependencies with yet unknown trade and business partners, new modus operandi, brokers, insurance companies, etc. That is why every EU government has failed to build a realistic energy strategy that does not depend on Russia. Continuity, LNG & LPG terminal bottlenecks, and processing, availability, cost, no weather restrictions when needed. Pipe delivery is safe, dependable, and cheap, sea freight is risky and cost-prohibitive
Germany had 15 nuclear plants in operation. The last 3 operating nuclear plants in Germany were scheduled to be decommissioned permanently in 2022. Part of the “Green Agenda” in the EU is to eliminate nuclear plants. France does not approve this, but is having technical trouble with its nuclear plants. France has said it will shut down 50% of its nuclear plants for critical maintenance this year at the worst possible timing imaginable.
Ref # 19 https://www.bbc.com/news/business-61298791
No readily available fuels of the right type (careful) mean no deployment no planes or other aircraft which means pretty much being stuck. Bad logistics, less food, no (or less) supplies, no heating to speak of. The European conventional military dependence on Russian fuels is beyond overwhelming, close to checkmate. Fuel imports are not anywhere near a military solution, just a way for civilians to survive if and when available and at a terribly high price.
“So the EU better be prepared to continue paying (many) billions of euros each week to Russia, supporting the Ruble and subsidizing its military in the process. It’s not just a short-term problem, either. If Germany manages over time (many years ?) to find adequate replacements for Russian natural gas, oil and coal, it will be at (tremendously) much higher prices. The era of cheap-Russian natural gas fueling the German economy is over. German energy-intensive companies, like its chemical giants, could not compete in the global market. Germany will face painful choices about the future of its industrial economy”. So without very specific and unreplaceable exclusive Russian grades of natural gas and oil and coal the European military are pretty much game-over.
Ref # 20 https://www.zerohedge.com/energy/trump-was-right-putins-gas-strategy-gives-germany-only-bad-worse-choices
unmanageable world finances
The camel is 990% overloaded and this one foolish decision may break its back. The world already rides on a wild $ 600+ trillion of a derivatives tiger that can only survive provided the corresponding counterparties do not fail.
“ Clearly, central banks in conjunction with their governments will have no option but to rescue their entire financial systems, which involves yet more central bank credit being provided on even greater scales than seen over Covid, supply chain chaos, and the provision of credit to pay for higher food and energy prices. It must be unlimited.”
Ref # 21 https://www.goldmoney.com/research/goldmoney-insights/financial-war-takes-a-nasty-turn?gmrefcode=gata
So unless something dramatically favorable happens very soon, economic-financial considerations will have highly negative socio-political impact driving the crisis to a high-pitch climax with the pitchforks roaming about European streets. Per Rabobank: “ When the ´food system´ breaks down, everything will break down with it”.
Per The Guardian, “…Come October, it’s going to get horrific, truly horrific … a scale beyond what we can deal with”.
Europe´s mad ban on Russian oil is just another perfect example of sheer Anglo-Saxon European puppeteering.
Ref # 22 https://www.theguardian.com/business/2022/apr/19/energy-chiefs-fear-40-of-britons-could-fall-into-fuel-poverty-in-truly-horrific-winter
Ref # 23 https://www.zerohedge.com/markets/rabobank-when-food-system-breaks-down-everything-will-break-down-it
Let the EU commit suicide.
Nicely integrated set of links, raises some interesting questions around the critique of the folly of trying to sanction to death your main supplier of key natural resources:
– is Von Der Liar abusing/exploiting her EU position to pursue old Prussian objectives of militarising Germany?
-are fuel related sanctions on Russia spectacularly backfiring in the short term, doubling their income, or are they just doubling our costs with the balance going to middlemen?
-what evidence is there of any detailed examination of the technical implications of Russian resource shortfalls, necessary for understanding their consequences for security, let alone economic and financial impacts? Have we been pitched into the unknown in pursuit of a political project?
Tim Putnam, thanks for your input.
Your perspective is original and valuable food for thought.
Good evening Jorge,
I enjoyed your piece.
While reading I had the bizzare idea the “planned destruction” of the EU is deliberate:
The EUR is going to zero, as the ECB is out of “tools” to continue the faćade of unlimited credit creation.
The ECB has no options left and will blame the war within Ukraine, Russia, and Putin as the reason for the collapse of the EU and its insolvent ECB. Every major catastrophe or war always relies on a pretext. There is no other way the West, including the US, can escape from the black hole of 4 quadrillion in dollar denominated derivatives that will suck in the global debt-based monetary system. It is unprecedented in scale and size. An unimaginable dilemma that will dwarf anything ever experienced in human history.
But why you ask, can’t it be stopped at or at least postponed?
The world’s central banks have tried to put off the day of reckoning, since at least the crisis of 2008 – 2009.
China stepped in to help bail out “the system” as they had massive USD reserves.
No more can be done now. Hence the pressure on Russia and China to capitulate.
Everything has consequences.
The creation of unlimited credit since 1971, and the precise correlation between energy ( predominantly oil ) and global GDP since then means that all credit ( or currencies ) created from the issuance of sovereign bonds ( debt instruments ) is actually a claim on future energy ( oil ) production. That energy is now limited. And before the “it’s not running out crowd” get too worked up, I remind everyone that even the most optimistic of the geologists in this field do not see global oil production increasing but decreasing. The cheap “easy oil” has long been burnt. It’s all downhill from here.
Energy performs work, which produces goods and services.
Future energy ( oil ) production is diminishing, so the compound interest on the global debt is mathematically impossible to repay. It will simply vanish. Along with all assets , both financial ( bonds, equities ) and tangible ( property ) that are priced ( denominated ) in any ( fiat ) currency.
Two other factors are at work to destroy what’s been “created out of thin air”: loss of faith in the currency; and inflation or “Weimer-style” hyperinflation causing a mad rush to get rid of the currency as fast as possible while it still has purchasing power.
Of course Russia and China are hoping to avoid this cataclysmic event by a revaluation of their currencies exchangeable at a fixed rate for gold and commodities.
It’s impossible to explain a complex topic such as the global economic, monetary, and financial system in a few paragraphs, much less try to explain what money is.
But to give you an inkling of what is at stake I’ll quote this excerpt from a 2001 ( yes 21 years ago! ) essay by economist Peter Warburton.
“Central banks are engaged in a desperate battle on two fronts”
“What we see at present is a battle between the central banks and the collapse of the financial system fought on two fronts. On one front, the central banks preside over the creation of additional liquidity for the financial system in order to hold back the tide of debt defaults that would otherwise occur. On the other, they incite investment banks and other willing parties to bet against a rise in the prices of gold, oil, base metals, soft commodities or anything else that might be deemed an indicator of inherent value. Their objective is to deprive the independent observer of any reliable benchmark against which to measure the eroding value, not only of the US dollar, but of all fiat currencies. Equally, they seek to deny the investor the opportunity to hedge against the fragility of the financial system by switching into a freely traded market for non-financial assets.”
“It is important to recognize that the central banks have found the battle on the second front much easier to fight than the first. Last November I estimated the size of the gross stock of global debt instruments at $90 trillion for mid-2000. How much capital would it take to control the combined gold, oil, and commodity markets? Probably, no more than $200 billion, using derivatives. Moreover, it is not necessary for the central banks to fight the battle themselves, although central bank gold sales and gold leasing have certainly contributed to the cause. Most of the world’s large investment banks have over-traded their capital so flagrantly that if the central banks were to lose the fight on the first front, then the stock of the investment banks would be worthless. Because their fate is intertwined with that of the central banks, investment banks are willing participants in the battle against rising gold, oil, and commodity prices.”
Full essay here:
Technical analysis of the Gold/Silver derivatives market:
I have a special interest in this topic and many contributors to “The Saker” have touched on the various aspects in relation to Russia’s use of commodities and gold to reconstruct a new monetary and financial architecture in conjunction with China, and The Eurasian Economic Cooperation Union member countries.
A new way to value commodities, and gold especially, is essential if the East is going to survive economically ( and politically and socially ) as the US dollar is continuing to be debased along with all Western currencies and the JPY.
Colin, thank you for your favorable comments and input.
My off-the-cuff reaction to what you posit is that similar situations have happened before — most specially in Europe — and not that long ago. And when people at large get fed up of their leadership´s mis-management they go get their pitchforks. So it ain´t over till is over.
In this scenario the mis-management is so large and so terrible that people will feel tremendous pain very soon. Stayed tuned.
Regarding GATA and gold and specifically referring to the current situation at hand I can´t help to strongly recommend two very recent articles of mine originally published here at “The Saker” and RE-published by several other important blogs such as Zero Hedge and Automatic Earth and Naked Capitalism, namely
I also have other articles regarding Central Banks and fiat currencies, none of which are really “money”.
One “famous” one was entitled “Too Big For Fed” published waaaay back in 2015, imagine.
But should leave that for later I guess, we´ve got enough in our hands as things stand !
With all due respect, the idea that we are “running” out of energy is laughable. In Canada alone, we have enough natural gas, oil, and uranium to power North America and beyond for another century. And it is NOT a case of these resources being relatively expensive compared to other oil sources; all the problems are government roadblocks.
It is government that won’t allow pipelines to be built. It is government that hamstrings industry and makes us all poor with carbon taxes. It is government that favours expensive and unreliable solar and wind over cheap and reliable natural gas. Running out of resources is a fiction created to disguise this reality.
Just as inflation is everywhere a monetary problem, energy problems are everywhere a government problem. Today, Russian oil is (nudge-nudge, w ink-wink) off the market, Venezeula’s production is way down, and Iran’s is constrained by sanctions. How are any of those supply issues related to the amount of the resource available? If all three were operating at reasonable capacity, and selling freely on the world market, would we be saying that we were running out of cheap oil? It’s easy to find similar issues with natural gas and uranium.
I’m all for electric cars, powered by nuclear stations that provide inexpensive and reliable electricity. Until then, we would be best served by government getting out of our way.
Our putative leaders seem inordinately happy to make us pay through the nose to “punish” Russia.
These traitors make their own people pay just to keep the US oligarchs happy.
Far from being silly Europeans, I fear these scenarios have been game played by the likes of Schwab who own the Europeon politicos. Is the actual intent to impoverish and starve Europe? Is the elephant in the room that of Bill Gates depopulation agenda? Just thinking out loud here…
But, but, but surely they’d never do that, would they?
The prpblem is, the depraved elites NEVER LOSE. Do you think they’ll ever take responsibility for their crimes and swindles? nsh, they’ll pass the bucket to the plebs as a “reset”. That until the plebs rebel for real, with guns, molotovs, pitchforks, torches and a lot of rope. Block airports, block police stations snd military bases until every goon is on their side or dead, then hang all elite criminals. A grassroot, spontaneous revolution for a change.
Russia needs to shut the oil and gas off immediately. In 2 weeks, the EU will come begging and all the sanctions will be lifted and the frozen funds will be returned. Going to war with Russia will not be an option.
talking is outmoded as a means of resolution of differences.
just say NO ! is the only solution
cut off delivery / tell them it is rubles at todays exchange rate delivered to Russian bank of choice and then the gas / Oil / Diesel sent to buyer and be done or sell through a third party for higher value of blended product delivery
move on and establish new refineries in the east for diesel etc – and tell Germany /et al that they are out of that business – too expensive to produce in EU – and then for all other manufacturing to follow – shut down commodities / shut down / factories /……..shut down EU !
the dopy chick Cerilla is history
yeah…but what is it not an oversight, but a feature?
If we KNOW it, they know it too.
The mad tactic of morting ukraine`s male population, depleting europe`s reserves, demoralising the whole continent – then coming up with a solution and lifting Damocles`s sword of nukes from the people of the world…it is all in the Protocols.
“morting ukraine`s male population”
This is the horror that I simply cannot understand, from the POV of what the eff is Zel doing to his own country?
To the women, too, who will have no men?
How will they become mothers—seems relevant to ask, on so-called Mother’s Day.
Te answer to this is, that it is not his people. Ukrainians are dying, his people are prospering…
Yes, Russia has options, as with the ban on agricultural exports from the EU that has caused both trouble and loss for EU producers and opportunities for Russian producers. That was a great move.
In addition, seeing as Germany persists in this self-mutilating ecologist madness (implanted by the US more than 40 years ago, by the way) of wrecking the combustion engine on the altar of climatologist superstition and pseude-science, Russia should make it clear that combustion engines, including for cars, especially for Audi/BMW/Daimler-Benz class cars, have a bright future in Russia and will not be phased out.
The key is the last point “unmanageable world finances” and that is driving the crisis.
Since 2008, and especially 2019 monetary policy is disastrous. Never mind goldbugs.
Glazyev explains that Russia’s Central Bank has also disastrous policies, worse than the sanctions.
To deal with this a Glass-Steagall bank separation must urgently be convened. That is FDR’s 1934 Bank Act, repealed in 1999 by Clinton and Greenspan, followed by crashed.
Then take FDR’s policy of Reconstruction Finance Corps, RFC, the basis for the Marshall Plan, on a vast scale. Notice Marshall Plan turning up in statements lately.
Then massive credit for exactly what China’s BRI is all about.
And not to forget Mariupol is a key node in the BRI.
Europe is already linking in to the BRI, and this fake confrontation is ONLY about blocking Germany fully linking in, which is natural and inevitable.
Ursula von der Lugen is definitely acting against German national interests, doing everything to stop BRI reaching Brussels. Which means China is next and they know it : they are wargaming such sanctions being applied to China.
”Never mind goldbugs.
Glazyev explains that Russia’s Central Bank has also disastrous policies, worse than the sanctions.”
Of course this was a side-swipe by Glazyev at the conservative policies of the Russian Central Bank under the tutelage of Elvira Nabiullina, although I think that she has Putin’s ear. However, Glazyev belongs to a 19th century tradition of guided capitalism which was developed at a global level by Alexander Hamilton in the US and Friedrich List in Germany. This latter system works but the night-watchman of laissez-fare doesn’t.
«That is why every EU government has failed to build a realistic energy strategy that does not depend on Russia»
Only a few countries depend on Russia.
The map forgets all pipelines on the south shore of the Mediterranean.
The markets are still global. We can’t buy here, then we buy there. Exactly the same logic for Russia: you can’t sell here, you sell there.
Forget Mr.Sarmat and nuclear. The moment a country uses that, it’s the end of mankind. Nuclear winter affects everyone everywhere! So Russia and USA won’t use it. That leaves the conventional. There Russia has a Defense budget the size of ONE big EU country. NATO has a few of those. How many Russias do you have?
Thinking there’s no defense for hypersonic missiles. While you launch 1, NATO launches how many hundreds? Do you have defense for all of them. Or are your defenses also “hypersonic”? Don’t be ridiculous.
The triangulation theorem. Yes, having an intermediary is more expensive. But there is enough market share in Europe to make intermediaries compete with each other. Ask too much from Europe, and you lose the contract to your neighbor.
Asia is growing. Yes, Russia will benefit from that. But I wonder how many decades it will take for people now in famine, to develop state of the art industries that need the energy amount now used in Germany and its neighbours.
Thinking China is on your side. China is on China’s side. Chine wins by being NEUTRAL now. 1.3 billion people without sanctions, and you just 140 million under sanctions (yes, 87% of the world’s population does not sanction you, but how many barely fed ones in Mozambique buy Russia’s exports?).
Tourism. Are you telling me tourists from China won’t travel to Europe because some European countries might not have fuel for its planes on time? Are there no other companies in the rest of the world. Do plains not get refueled when landing in other zones? And by the way, how is tourism in Saint Petersburg nowadays without any flights from the West?
Renewable energy. Have you heard of it? For a few days a year, countries like Germany already have NEGATIVE prices of energy (we’re not paid to consume, but we pay less at the end of the month), because they produce more than they need. That investment is growing and growing.
And if nuclear energy is needed, you must be delusional if you think Russia is not the only source of radioactive goodies.
So, please, stop this Tarzan nonsense of using your fists to hit on your chest. No one is invincible. No one plans ahead of everyone else. And in total war, no one wins. At least 2000 dead Russians, and so far you got up to 95% of Lugansk oblast and little more than 50% of the Donetsk one, and the fronts are slow, stopped, or even retreating (like in Kharkiv). Ans till you want more percentage? Then don’t just do the math on the amount of oil barrels, but also do the math on the amount of Russian coffins of well trained, experienced and specialized troops… Try triangulating that on your mother’s V.
Interesting, avoiding the most important point, the last point.
Even there there could be a mistake, it is $2 QUADRILLION of nominal unpayable debt hanging over he entire transatlantic, including the City of London. That is hypersonic incoming!
And Russia’s economics advisor Glazyev knows exactly what that means.
It means a sweeping banking re-organization is immanent, whether Tarzan bankers like Yellin, or Lagarde play Jane!
The ´$2 QUADRILLION´ you are correctly referencing is of total “nominal unpayable debt”.
Instead, the article refers to ” 600+ trillion in derivatives ” which is a smaller figure but still tremendously huge and unmanageable and chances are it should trigger the banking system default. The author cites Alasdair MacLeod as source per his Ref # 21
https://www.bis.org/statistics/derstats.htm BIS, Hjalmar Schacht’s Bank of Banks, reports OTC at 600+ Trillion.
Financial aggregates hit $2 quadrillion in 2022.
Not to be sniffed at, $600+ is also hypersonic incoming!
This will age well, you can feel the butt-hurt.
There are not enough oil tankers, nor lNG tankers. Transit times on the tankers change, no tankers currently exist to replace pipelines, existing southern pipelines are probably at full capacity already.
LNG / LPG tankers take a while to build, and are far more costly (on a per-unit level) than other bulk tankers. They are also more costly to operate (that liquefied gas has to be kept liquefied = power hungry refrigeration systems).
So, the tankers are costly to build, costly to operate (and I note have a shorter and more costly service life than other bulk tankers, if only for the regulation / inspection requirements), so therefore are a higher risk.
Higher risk (to the operator) = higher risk premiums (insurance, etc), all of which is passed on the the end user as a higher cost per cubic metre gas transported, vs. overland (pipeline).
If our German friend is at all “environmentally aware” the added environmental (and greenhouse effect) costs should be at least some concern :-)
Dennis & Phil,
If I interpret you both correctly, the LNG / LPG “solution” is terrible, not a solution by any means. Rather nightmarish, not solving much and complicating everything, specially costs and scheduling and logistics. To ´phase out´ anything in 6 months (!!!) as Ursula is saying you need to ´phase in´ the right replacement with the right gradual timing, etc., etc.
And another factor is the “sudden death” moment, no possible easy-does-it transition it´s all at once right now with no prior advance notice like changing a tyre as you keep driving without ever stopping the car. I mean it will be terribly disorganized and painfull. The article mentions in passing the chinese plate spinners analogy which is quite applicable in this case also. Social and political unrest is guaranteed.
“The markets are still global. We can’t buy here, then we buy there. Exactly the same logic for Russia: you can’t sell here, you sell there.”
Not really. Gas and oil can be transported by sea, but which shipping company would risk its ships, if there’s warning that something might happen to them on the way? Also, how would you transport that to the landlocked countries in Europe?
Great article. Thanks for the true perspective of how irresponsible the EU’s actions really are.
Turning the spigots off is akin to Russia winning WW3.
If it were that easy to buy non-Russian gas, oil, uranium, grain, etc… the US would have sanctioned the EU and tried to kill Russia’s economy without worrying about placing nukes in Ukraine near Russia’s border.
Gee, where to start ?
I´ll try to keep it short.
(1) Don´t trust the author, but please do read the references.
For decades now and for very good reasons Europe has developed a massive dependency on Russian fuels.
Remember Willy Brandt´s Ostpolitik and Gerhard Schröder´s “change thru trade” ?
(2) “… the pipelines on the south shore of the Mediterranean…” are (a) less than 5% of European fuel supplies (b) also subject to feed problems just as well. It´s an interconnected market with lots of politics, vested interests, and plenty of moving parts affecting each other live, can´t ensure much of anything with anybody under these circumstances. Other posters below also respond to these supposed “mistakes”
(3) This one is easy. Please re-read paragraphs starting with “not your dog” and below.
(4) The article never addressed anything near thermonuclear war possibilities. etc.
(5) Same as 4 above, never addressed anything related to hypersonics.
(6) Please. Today it´s a seller´s market who pick their right buyers for their right ask. Buyers don´t bid nothing, just suffer. I´ll save my breath on this one.
(7) I respond with just one single acronym: BRICS now.
(8) China and Russia have just entered into a “no limits” Treaty, so…
(9) Tourism: from China and everywhere else. I rest my case there.
(10) Yes I know all about renewable energy, do you ? These events are evolving right NOW not in 2050.
Now hard feelings, but I suggest it would be best to re-read the whole article slowly, sorry.
Anyway, thanks for the input.
An excellent rebuttal. May I add, “the few days a year when people are paid to consume energy” – a rather extreme form of grid management! A few days does not equate to a year, and just last week we read that the much-vaunted German wind power industry was only able to produce 2% of installed capacity.
Baseload capacity is essential, and reliance on wind / solar a very risky move indeed, unless there is a) adequate fast-response storage (i.e. very costly “battery farms”), or b) pumped (hydropower) storage.
On the subject of solar – on a 50% cloudy day, grid balancing can be very difficult indeed, with rapid (and unpredictable) changes of energy flows at a local level depending on local irradiance. We are seeing this in Australia – cloudy and windy days can play havoc with local level distribution, and the number of (albeit localised) outages is increasing as we become more reliant on domestic roof-top solar installations.
As for the “durability” of solar – again, “down under”, just ask the many Sydneysiders who have seen their (expensive) rooftop arrays demolished by “moderate” hailstorms. The more efficient glass covered panels are not that durable, especially when significant impact is concerned.
Here’s one for you and Jorge, Phil, from someone south of you in Victoria’s capital (and with a 10+ y.o. solar array that hasn’t missed a beat. But, that’s by the by).
I still struggle with why so many focus on the renewables ‘tech’ developed in the West. It is the Chinese who lead both the investment and R&D renewables races by miles. Aside from renewables tech, the Chinese have been granted around half of all patents in the world, for a number of years now.
Now try this, from less than 2 weeks ago – https://www.nature.com/articles/s41929-022-00775-6
“Upcycling CO2 into energy-rich long-chain compounds via electrochemical and metabolic engineering”
(Note: “Circular economy”)
“Upcycling of carbon dioxide (CO2) into value-added products represents a substantially untapped opportunity to tackle environmental issues and achieve a circular economy. Compared with easily available C1/C2 products, nevertheless, efficient and sustainable synthesis of energy-rich long-chain compounds from CO2 still remains a grand challenge. Here we describe a hybrid electro-biosystem, coupling spatially separate CO2 electrolysis with yeast fermentation, that efficiently converts CO2 to glucose with a high yield. We employ a nanostructured copper catalyst that can stably catalyse pure acetic acid production with a solid-electrolyte reactor. We then genetically engineer Saccharomyces cerevisiae to produce glucose in vitro from electro-generated acetic acid by deleting all defined hexokinase genes and overexpression of heterologous glucose-1-phosphatase. In addition, we showcase that the proposed platform can be easily extended to produce other products like fatty acids using CO2 as the carbon source. These results illuminate the tantalizing possibility of a renewable-electricity-driven manufacturing industry.”
Fits perfectly with Michael Hudson’s assertions that the West runs a ‘Financial Capitalism” economic system, while China runs an “Industrial Capitalism” economic system.
David, you are correct.
China is technically way ahead of everybody else.
Also, I always follow Michael Hudson… and BTW he also follows me.
As a matter of fact Michael has quoted and referenced my articles several times in his books.
NATO hypersonic missiles? Now, how about you name me some? None come to mind because there aren’t any in existence.
RE: defense budget. Yeah, sure. The contribution of just the American barbers to the US GDP dwarfs the Russian defense industry. That’s the magic! The Russian education is mostly free, and the American one is super expensive, so it should be much better, right? Wrong!
On a serious note, you should be comparing the inventories and the rate of production, not the nominal budgets. Compare Tomahawks to Kalibrs, Abrams’ to T90, etc.
Are you on meds?
The wheels on the buses in the EU won’t go round and round all day long without Russian AGO.
The BIGGEST mistake:
Displaying your ignorance and stupidity in public.
Taking just one of your mistakes: NATO does not have any hypersonic missiles and is unlikely to have any in the near to medium future, but Russia (and China) DO have them. How is NATO going to safeguard against if the missiles start flying?
Je pense que prendre ses désirs pour des réalités fait partie de la psychiatre…
Tout les pays de l’union sont plus ou moins dépendants des huiles Russes. Surtout l’Allemagne (plus grand pays industriel).
Pipelines du Sud !!!juste un indice, les huiles
Viennent de quels pays ? Est ce qu’ils peuvent augmenter leur productions ? En ont-ils assez ?
Les bras m’en tombent, oui personne à part vous et votre intelligence supérieure n’y avait pensé. C’est tellement facile d’acheter ailleurs des milliards de M3 de gaz ou de barils de pétrole ailleurs dans le monde.
Je crois que vous ne connaissez rien au domaine militaire à part dans les jeux vidéo.
Combien d’armées compétentes dans l’O.t.a.n ?
Combien de Brigades opérationnelles ? De soldats motivés et de généraux compétents ?
Vous parlez de centaines, en partant du postulat du #5 c’est à dire pas d’attaque mutuelle entre Russie et US. La France en possède 48, l’angleterre c’est une blague.
Russie n’a même pas besoin du l’hypersonique.
Oui, on est d’accord ça coûtera donc bien plus cher.
Réponse typique d’un occidental vaniteux se croyant supérieure du reste du monde. Les pays qui en ont la volonté, pas gênés , avec de bon politiques peuvent se développer rapidement. Surtout avec des matières premières en quantités et pas chères.
Chaque pays défend ses intérêts à part les européens, par contre je crois que vous n’avez pas bien lu l’article et son concept.
Si tout est coupé, j’espère bien que les gens du Mozambique seront assez gentils pour vendre leur pétrole (beaucoup de réserves dans le canal la bas). D’où les derniers essais de déstabilisation dans cette région d’Afrique.
Sur ce domaine, aucune compétence en ce qui me concerne donc je ne développerai pas.
Le renouvelable, pareil, on lit tout et son contraire. Pas d’avis en ce qui me concerne.
Par contre combien de grand producteur d’uranium ?
Moi j’en connais 3 grands.
Niger (d’où présence française dans cette zone D’Afrique).
Vu que vous connaissez tout sur tout , dites moi où vont se fournir les européens ?
Donc on a eu droit à une diarrhée d’un lecteur du NYT.
I think wishful thinking is part of psychiatry…
All the countries of the union are more or less dependent on Russian oils. Especially Germany (biggest industrial country).
Southern pipelines!!!just a hint, the oils
What does pay come from? Can they increase their productions? Have they enough?
My arms are falling, yes no one except you and your superior intelligence had thought of it. It’s so easy to buy billions of cubic meters of gas or barrels of oil elsewhere in the world.
I don’t think you know anything about the military except for video games.
How many armies are suitable in N.A.T.O?
How many operational Brigades? Motivated soldiers and competent generals?
You speak of hundreds, starting from the postulate of #5, ie no mutual attack between Russia and the US. France has 48, England is a joke.
Russia doesn’t even need hypersonics.
Yes, we agree it will therefore cost much more.
Typical response of a conceited westerner believing himself superior to the rest of the world. Countries that are willing, not shy, with good policies can grow fast. Especially with raw materials in quantities and not expensive.
Each country defends its interests apart from the Europeans, on the other hand I believe that you did not read the article and its concept well.
If everything is cut, I hope the people of Mozambique will be nice enough to sell their oil (lots of reserves in the channel down there). Hence the latest destabilization attempts in this region of Africa.
In this area, no skills as far as I am concerned, so I did not develop.
The renewable, the same, we read everything and its opposite. No opinion as far as I’m concerned.
On the other hand, how many major uranium producers?
I know 3 big ones.
Niger (hence the French presence in this area of Africa).
Since you know everything about everything, tell me where the Europeans are going to get their supplies?
So on one was entitled to an authorized from a reader of the NYT.
Mistake 1: “Russia has a Defense budget the size of ONE big EU country. NATO has a few of those. How many Russias do you have?”
This treats military capability as a black box. Wrongly assuming that size of expenditure on ‘defense’ equates to superiority. The largest expenditure is, ergo and by definition, the one which will prevail.
Whether it is military or anything else the real world does not work on such a delusional basis. As Andrei Martyanov and Larry Johnson – among others – consistently point out and demonstrate its about bang per buck. Quality not quantity. Most of the Western military hardware under performs for the amount spent on it. That’s because Western military equipment is simply a profit cash cow for bottom feeders.
Even Kipling was observing this nearly a century and half ago. He even wrote a poem about it – “Arithmetic on the Frontier” at a time when untrained Afghan peasants were doing what later generations did in not only Afghanistan, but also Iraq, Vietnam, and elsewhere. Demonstrating the reality of quality over quantity.
Which is not limited to equipment but also personnel and systems. Right now there is no one at any level of decision making within the West who you would trust to properly count the railings. The calibre of personnel across the entire pyramidal spectrum – military, political, economic, education, health, social, cultural – is so shockingly low one wonders why the Western self identifying elite and its cadre are allowed to go outside unsupervised?
The assumed notion that this bunch of morons and cretins are capable of doing more than scratching their own backsides without falling over is probably the unpublished punchline to Monty Pythons ‘funniest joke in the world’ sketch.
Mistake 2: “Thinking there’s no defense for hypersonic missiles. While you launch 1, NATO launches how many hundreds? Do you have defense for all of them. Or are your defenses also “hypersonic”? Don’t be ridiculous.”
Right now the US does not have a working or functional hypersonic capability. Its most recent tests have all ended in failure – that pesky quality issue again. If they did possess such capability right now they would be threatening to use it. They may have such capability a few years down the line but things move on.
One possible clue being this:
An incident which raises the possibility of at least the potential of electronic warfare systems to not only knock missiles off course but reprogramme their target whilst in flight. What the “we create our own [made up] reality because we are an Empire” crowd running the West would no doubt refer to as a “known Unknown.”
All in all this contribution is on a par with the level of analysis those of us born in the West have had to put up with experience for generations. One hundred years or so after WW1 and we are still lions led by donkeys. Only this time around the donkey is Muffin the Mule.
For the record, NATO, including the US, has no hypersonic missiles in its arsenal. There is a plan to deploy newly developed hypersonics in Germany some time this year, but so far, it’s only a plan. Given the sorry history of US weapons programs, I wouldn’t bet on it.
Mistake 1: Yes and their names are Germany Hungary Bulgaria Slovakia and Czech republic.
So console their people next winter and console their industrial output (income)
Words are easy, consequnses are hard.
Gas income for Russia is not their primary income
Mistake 2: Mediterranean. pipelines are already in full capacity and of course prices will skyrocketing
Mistake 3: The World is so called “closed system” Whatever you do on one side of system, inevitably beckfires on other side of system.
So commodity quantity are alwaus the same (more or less), but prices are not.
Mistake 4: Do not forget tactical nukes. For some stupid Poland “independent” military action in Ukraine.
Mr Sarmat is always there to beckup tactical.
Mistake 5: See above
Mistake 6: Key words are “more expensive” And THAT is directly connected with peoples standard.
So lets see who’s living standard is more likely to dramaticaly fall ?
Mistake 7: Russia will newer come back to EU. They moves are slow and calculated, but when they decide, then they do not have “reversal gear”.
Bismarck once said : Russians is slow to mount, but when they mount, they ride quickly.
Mistake 8: Absolutely – China is on China side.
You see , Russian and Chinese goals are the same :-)
What do you think – that China will sit on yours corner until time has come to “solve Chinese question” ?
Mistake 9 and 10: Will see this summer how Greek tourism doing without Russians. Turks, Egypt and Tunisian are ready to takeover.
Renewable energy – well, how to say – you are not good in Math aren’t you ?
I feel the need to make some comments to your „mistakes“ enumeration.
Pls feel free to comment as well …..
Yr Mistake 3
You are right – that is the exact reason why sanctions do not make sense and will have only slight effect, but will leverage cost for all parties.
Yr Mistake 4
Mr. Sarmat is something comparable to a live insurance policy. To have one in effect is very …… effective, as history shows.
The EU defense budget …. C‘mon: the „Bundeswehr“ spents nearly as much as the RF in defense according to western data. That means nothing.
The reality of the German Army is: No numbers of tanks, no subs, no jets, no helicopters, no air defense system, useless frigates (a few) …. What is available is in a lousy shape.
But lots of propagender for gays, obese, lesbian, mothers etc etc – three words only for that (whatever it is, it is definitively NO army): Forget about it. No „Kampfkraft“ left in Germany alone, I doubt it is the case in – let‘s say – Denmark or Netherlands.
Yr Mistake 5
Modern missile warfare is not a „tit for tat“ – the idea of hypersonic missile is to overwhelm the enemies forces within minutes without the enemy realizing what is happening.
Shock and awe – once that is achieved (given that the RF has sufficient numbers of these weapons) the amount of missiles that are available to be send to RF territory is drastically reduced. On their way to the RF the remaining forces will become engaged by the strategic missile defense umbrella of the RF.
Of course some will reach their aim ….
Anyway – here the cards are in favor for the RF. The only open question is the stockpile of these weapons ….. that is crucial and of course: secret to all of us. But it is key.
Yr Mistake 8
You are right – in general.
But: having China on the customer side alone is enough to replace the demand for oil and gas of the whole EU. It is that simple. Not without risk for Russia – but these risks are foreseeable and manageable. And Russia has something to offer above carbohydrates – let‘s never forget Taiwan.
Yr Mistake 10
There is not enough renewable energy – and not in time.
Renewables are not reliable. The term „renewable“ is in contradiction of the „conservation of energy“ law. And that one is the only one we need to know. „There is no free lunch“ is the vulgar expression of exactly the same law at the stock exchanges. Unknown to the environmentalists ….. no matter. Nature will go over the „believers“.
Renewables destroy the landscape in an unprecedented way – Forrests are already gone and will continue to go. Only Germany – it‘s stupid, Babe – is able to cut of itself with one political decision from energy AND water resources at the same time.
Congrats to that – that is the level of economical and military intelligence the Russians have to deal with.
They will manage that as well …. Time will tell.
This is what the hate of losing power does to one, any ending except a mending.
Better to reign in Hell, than serve in Heaven?
Beautiful, Jorge, just beautiful.
Thank you my friend, your encouragement helps lots.
Mine is a very lonely business.
Europe can freeze and starve but that isn’t a win for Russia. The only way Russia truly wins is if it can force the EU off western banking and financial systems and into those of Euroasia. It has to bring down the entire western economy, ie US, or it loses in the long run. Europe has to turn against the US.
Percy, me thinkx that “freezing and starving” Europe for a week will be a big win for Russia in that Europe will finally understand what´s going on and come back to focus their hijacked senses. Yes Eurasia is Europe´s future. We shall see.
The article is based on the assumption that so many of the world’s leaders, European leaders in particular, are stupid.
The reality is that they are EVIL. They believe and act as though they are the “chosen ones”.
WAR, PLAGUE and FAMINE – the three always go together. First we have had two years of state endorsed hype over Covid. Covid a disease with a better than 98% recovery rate. That has successfully destroyed national economies and international supply chains.. The “cure” has been far more deadly than the disease.
The war in the Ukraine has taken a long time to come to fruition. It started after the break-up of the old Soviet union with the expansionist aims of the EU. (NATO is more or less the EU with the USA and Canada tacked on) Of course Russia feels threatened. The West is fighting by proxy…it’s safer… the only ones who suffer are Ukrainians and some Russians.
Famine: that too has been orchestrated. The West adopting “green” policies…carbon net zero, whereby other countries can do the polluting…farmers being paid NOT to produce food (to save the environment.) Add to that uncontrolled immigration, designed to overwhelm national economies and destroy national cohesiveness.
Who is behind all this? The WEF, aided and abetted by the United Nations. (or is it the other way round?) Take a good look at the players. Klaus Schwab and his disciples, who include such delightful persons as Bill Gates, who openly state that the the population of the world must be drastically reduced.
THEY assume that THEY will survive the catastrophe that they are planning. A world in which Evil is GOOD… Wrong is RIGHT… Down is UP.
In my view, Putin is fighting my battle for me. He is fighting against WOKE. He is fighting to uphold European CHRISTIAN values and we are forcing him into the arms of “allies” that perhaps he would rather not have, like China.
I’llend with a quote from a master:-
“…If you tell a lie big enough and keep repeating it, people will eventually come to believe it.
The lie can be maintained only for such time as the State can shield the people from the political, economic and/or military consequences of the lie.
It thus becomes vitally important for the State to use all of its powers to repress dissent, for the truth is the mortal enemy of the lie, and thus by extension, the truth becomes the greatest enemy of the State –
Joseph M. Goebbels in Dissent and the Truth – German Minister of Propaganda, 1933-1945
And the truth is they are neither stupid, nor evil, but BANKRUPT. In a way that is almost impossible to describe – $2 QUADRILLION nominal unpayable debt that must be written off.
They know full well a reorganization leaves them somewhere in the Azovstal dungeon.
The truth of this financial disaster, that the Author touches on in the last point, has been repeatedly, and forcefully forecast over decades by the greatest enemy of the state.
An excellent presentation and explanation of the looming financial catastrophe is provided by Leslie Manookian in Grand Jury Session 5. Her segment starts at ca. 1:27:57. The crux of the financial matter is maybe 15 minutes in.
According to her and Patrick Wood, the true, “real” driver of all of the recent manufactured crises is the imminent collapse of the whole pension and debt system, groaning under $600 trillion worth of debt that cannot be paid. Much of it to pensioners. I believe Michael Hudson has offered the same analysis, that is, these crushing pension and other debts and what they will do—soon— to the world financial system and “order” are the root “problem” being solved by the coordinated international clampdown and total control.
I have read that “all wars are bankers wars.” According to a fellow named I think Brandon Wilson, linked at a different Saker thread, Putin and Russia and China are all in on the WEF program to eliminate the current banking system becaluse they are all basically in the same boat, and there is only one solution.
“All wars are bankers’ wars’ makes a lot of sense to me.
Except, there were wars before there were bankers.
In the feudal era kings or others near the top fielded armies via their vassals, who were bound to supply knights and men. I don’t know if any of these felllows got “paid” in any contemporary sense. They got lands etc and their knights got booty.
According to John K. Thornton, in A Cultural History of the Atlantic, a big factor that drove the “age of discovery” was the need of European sovereigns for cash ot pay troops, resulting from the disintegration of the feudal system. I think that era, the early Renaissance, also saw the beginnings of European banking. The Medici were a banking family; per Wiki the Medici bank became the largest in Europe. .
Less well known is the house of Fugger, which according to Wiki more or less replaced the Medici Bank and controlled a huge portion of the Euroepan economy. The Fuggers financed the rise of the Hapsburg dynasty and also were venture capitalists who developed much of the industry of Central and Northern Europe, especially mining and metals, including in South America. The Wiki entry is pretty interesting. https://en.wikipedia.org/wiki/Fugger_family#Founding. they ended up being far wealthier and more influential than the Medici.
Then comes the Thirty Years’ war, and Germany and central Europe were destroyed along with the Fugger Bank..
Next up: The Rothschilds, who became wealthy and influential financing wars (such as fielding the Hessian troops that ended up being rented out to the English to put down the American rebels; Hesse was a very poor little principality and this was one way the prince made some money).
So, the point of all this for me is:
If “all wars are bankers’ wars,” but the current banking system is about to collapse or implode, is there any way to segue into a different financial terrain where there aren’t any bankers or anyone else to profit from war?
Well, looks like no one is interested in my query.
But I just discovered the brilliant German economist Richard Werner, and I think he has some answers.
Your excellant insight complements the Author’s analysis beautifully cheers
“and we are forcing him into the arms of “allies” that perhaps he would rather not have, like China.”
I go along with most of what you have mentioned but i have to point out that the evidence is that Russia and China are doing just fine, cooperating closely and trust each other fully…
so i really cannot understand where you got the idea from that Russia “would rather not like to be friends with China” – this assertion pops up now and again but i have yet to find any evidence that Russia is uncomfortable with its relationship with China…
in fact, the relationship is getting stronger each day….
Good article Jorge!
The accidental/deliberate collapse of diesel supplies, around our world, will be an end-game, as almost all the supply chains of farming, fishing, and transport, depend on diesel.
Europe does seem to be on a suicide mission. Has Europe learnt nothing over the past twenty centuries!
Ric G, thanks for your comment and support, much needed by the way.
Great article. Thanks for the true perspective of how irresponsible the EU’s actions really are.
Turning the spigots off ia akin to Russia winning WW3.
Many thanks for your kind words and positive judgement of my article.
All I´m trying to do is to establish the basis to prompt an open and meaningful debate on this subject.
I think there is not better place to attempt to do that than right here in “The Saker” blog.
Thanks Andrei for the opportunity.
Thanks Amarynth for your excellent editor role.
The EU suicidal operation was semi-rational when the US believed it would achieve regime-change in Russia by the end of August and a Yeltsin-type figure would open the taps to the EU at low prices. OK, that hasn’t happened, the opposite has happened. Time maybe to declare victory and reserve course? I have heard people say the US neocons have “no reverse gear.” That seems about right. But now the EU is up in the high branches of their ideological tree and are busily sawing away at the branch they sit upon. The question becomes, what does the EU do by the end of August, if the US regime change op fails to materialize?
Casey, nice intelligent summary of yours.
You say ” the opposite has happened “, true that.
But watch out that the “time to declare VICTORY” as you say has already been lost so I can´t follow you very well on that idea. And then you ask :” The question becomes, what does the EU do by the end of August”…
Well, clearly what the EU is effectively doing ( not “thinking” in doing but REALLY doing) is doubling and tripling down along the same head-on crash course which means that, if such ideology continues much longer, by the end of August in four long months from now Europe will be a different place AWKI today, period.
And then it´s up for grabs what will happen with Europe.
Of course, the possibility of reversing course is still there.
But this EU leadership won´t do it voluntarily.
So that means we should be closely monitoring serious social-political unrest and the pitchforks in the streets.
That´s what may probably happen before the end of August as you ask.
Dear Jorge, thank you for the excellent overview.
As for the end of August, the “serious social-political unrest” can well trigger the imposition of Martial Law (fascism) in Europe and, eventually, in the US. Unlike Europeans, the US citizenry is well-armed (even if dumbed down). The covid policies, Mossad training of police, and other “homeland-security” signs point in the direction of fascism.
Also, when facing an existential threat, Russia will nuke the vital nodes of the rotten US/UK. Understanding this simple fact keeps the US “deciders” at bay. Thus we hear the ad nauseam repeating that there will be no American boots on the ground in Ukraine.
Dumbed down can be rapidly awoken when things turn bad.
Thanks Anna, I´m glad you liked it !
I have been feeling and saying all along that only the people of the EU rising up in rebellion can transform the situation.
@ Jorge Vilches
here is a quote from Gail Tverberg:
Eliminating, or even reducing, Russia’s crude oil production is certain to have an adverse impact on the world economy.
Figure 9 shows the step-down in crude oil production that occurred in early 2020 and indicates that the world’s oil supply is having difficulty getting back up to pre-COVID levels. If Russia’s crude oil production were to be eliminated, it would make for another step-down of comparable magnitude. Major segments of the economy would likely need to be eliminated.
It is this paragraph that I/we should find the most important/significant and why is because I work in the sector and I see on a daily basis the affordability issues.
Saying that the Ukraine invasion is causing the current high price is mostly a convenient excuse, suggesting that the high prices will suddenly disappear if this conflict disappears. The sad truth is that depletion is causing the cost of extraction to rise. Governments of oil exporting countries also need high prices to enable high taxes on exported oil. We are increasingly experiencing a conflict between the prices that the customers can afford and the prices that those doing the extraction require. In my view, most oil exporting countries need a price in excess of $120 per barrel to meet all of their needs, including reinvestment and taxes. Consumers would prefer oil prices under $50 per barrel to keep the price of food and transportation low.
Oil and the Industrial Revolution?
For then there will be great distress, unequaled from the beginning of the world until now—and never to be equaled again. Mathew 24:21
I often wonder if these two sentences don’t go hand in hand with one another? If Matt. 24 isn’t speaking and quite literally so about this very issue? The coming end of the Industrial Revolution?
I found it odd to that when the Alberta oil sands was shut down and major layoffs occurred what appeared in the very same week in the news? A brand new 400 million dollar offshore oil rig left Nova Scotia to begin production which left me questioning hmmm what they can’t do both?
The oil industry feast and famine? Feast and Famine?
Where o where will the governments get their tax dollars if something catastrophic were to occur? Saudi Arabia is in debt to the tune of how much? etc etc etc etc?
@Gerry, thanks for the input.
Yep, depletion, peak oil.
To that let´s add the three dirty little secrets everybody sweeps under the rug.
(1) shale oil sweet spots are vanishing from subsurface everywhere as we speak.
(2) with ever more fracking, the more you produce the more you LOSE.
(3) for how long can the US Fed happily finance a losing business ?
“…The camel is 990% overloaded and this one foolish decision may break its back. The world already rides on a wild $ 600+ trillion of a derivatives tiger that can only survive provided the corresponding counterparties do not fail.”
That’s the main concern: such situation can only be reverted with a “Great Reset”, just like the ones that happened in the 1910’s and 1930’s-1940’s, where drastic decisions affecting national and global economies and productive forces can be taken without political/economic fallout affecting decision makers and economic elites.
Honestly, I always thought those rumours of billionaires preparing bunkers or developing means to live outside Earth for years were just exaggerations or conspiracy theories, but on a second thought it is the “easiest” way to implement WEF’s Great Reset: unpayable debts, as well as billions of “undesirables” either being a nuisance or owning valuable/desirable assets, wiped out in a flash.
@ Roberto Jr. Rumours?
on the back jacket of Willard Cantelon’s book reads:
“The author reminds his readers that the masses which accepted the ration system under the crisis of war will accept the new number system under a monetary crisis created by those wishing to establish world control.”
The lynch pin I believe will ultimately be a version of the Social Credit System of China where your funneled into a system of total control. This is the promise of technology which the technocrats are and will seize upon. Note words of Gary Littlejohn here:
China’s proposed social credit system a just bureaucratic interface for existing legal and regulatory systems. While it includes new enforcement mechanisms it’s an extension of the law rather than an independent rule-making authority, and all data collection and penalties require a legal basis.
Chinese police, for example, won’t do evictions or debt collections, and don’t have time for assholes caught burning train seats with cigarettes. Enter Social Credit.
After a court hearing, deadbeats and vandals lose Social Credit points and find their lives more difficult and/or embarrassing. This applies as much to wealthy developers who stiff their subs (and can no longer travel by air or HSR) as to turnstile jumpers, who can no longer flash their phones to pay for stuff.
It’s a work in progress, and has not even nationwide yet, but it’s ingenious and inexpensive.
@ Godfree Roberts
ingenious and inexpensive.
Yes, I remember to from a 1000 years ago a system called stocks where the deadbeats were locked in and then found their lives difficult and embarrassing with rotten food thrown in their faces.
Law doesn’t work never has and never will but whoa connect it with technology and banking especially and voila one has the prospects of truly implementing a system of control unparalleled in human history.
I firmly believe that coupled with the implantation of either a computer chip or a QR Code in ones flesh this system has the potential to bring about something truly sinister. A system that had its actual beginnings way back in the 1930’s with ones SIN Number. It’s not about money so called anymore but a number.
As Dr. Cantelon again put it:
“In 1945 the coming of the computer paved the way for a worldwide system which would transform men and masses to digits and file cards.”
“World War 2 produced a system of rationing where the number on the coupon took priority over man’s money as legal tender, or a medium of exchange.”
Will this number not on a coupon now but on ones actual person, hand or forehead, take priority over man’s money as legal tender, or medium of exchange in a new system of rationing?
Thats the question and for me it is a most important given the prophecies of the Bible which foretells this very thing happening.
China and others may laud this as ingenious but I fear it will lead to something terribly sinister. It is the nature of man. We are a lawless people it is why we find the words:
See, I have refined you, though not as silver;
I have tested you in the furnace of affliction.
For my own sake, for my own sake, I do this.
How can I let myself be defamed?
I will not yield my glory to another. Isaiah 48:10
Freedom real freedom comes from the self-government of the individual person not from some outside forcing which this Social Credit System seems want to do. Unless there is a change in the heart nothing works to bring obedience and lawfulness except if one has the ability to control one conscience and bread as Dostoevsky wrote.
And i must say if what Jorge Vilches wrote here comes to fruition we may indeed find Europe rationing out to its people their allotment of bread? All that is left to occur is a new king to arrive to demand the peoples worship?
Impressively thorough and comprehensive analysis of the unfolding tauromachy spectacle in which the bull is confronted by a rabies-infected mangy cur with horrible halitosis.
Or, as the author has it, “a well-fed and rested Russian Goliath with hypersonic weapons under his arm vs. a worn-out underweight European David with a worn-down sling and lots of very small stones…”
(In the above I would delete “lots of,” but then I am not so adverse to explicit vulgarity as the author is.)
My only disagreement is with this explanation:
“Only mediocre light-brained European leadership can propose such suicidal move 100% guaranteed to blowback in-their-face.”
I do not dispute the idiocy of the EU army of parasitic bureaucrats but they only execute orders.
Are the architects of this destruction really just imbeciles incapable of understanding the consequences of their actions?
The uniform suicidal effect of these measures dovetails too well with concomitant campaign at all levels to destroy not only the economies of European nations but also their national identities, their moral values, culture and traditions to be coincidental rather than part of an intended “creative chaos” from which they think they will be picking up the pieces.
Too many events in the recent years (the pandemia cum experimental vaccines, climate change “sustenability” initiatives, the daily 10-minute hate programs. against “terrorism,” “white supremacy,” “patriarchy,” and now Russia, all facilitated by interdiction of free speech) look far more like a vast, global criminal conspiracy against the “useless eaters” than blundering idiocy.
Many thanks for your valuable comment, let alone you favorable general opinion on my piece.
Your support is much appreciated — and needed, trust me…
Being my own work, any comment of mine runs the obvious risk of
(a) not coming through as intended or, like some people may say, not sounding “okay”
(b) not resulting as constructive as I mean it to be
With those two caveat disclaimers I dare to say that I´d agree that it´s a thorough and comprehensive article.
A reasonably well summarized map of sorts re the current situation.
And yes, it took both tons of highly compressed time during the past months and a whole lifetime experience to know how to summarize the essential components of this conundrum. By the way, I´m not sure it shows that much, but I confess that English is my second language. Spanish is my mother tongue.
ariadna, you know what ?
Many times I´ve thought of your thesis myself.
“Are the architects of this destruction really just imbeciles incapable of understanding the consequences of their actions ?” Well, they could very well be. Think of what Germans and Italians went for some 85 years ago.
So are they ?
Or them just playing the part ?
Maybe both, who knows.
the kingdoms of this world are ruled by none other then ‘the god of this world’ [Satan}
Yes because the current governments of western Europe are all puppets, controlled minions just like Zelensky who helped to destroy Ukraine. The leaders of western Europe, the US, Canada, etc. know they are destroying their nations both financially, morally and by stripping the natives of their national pride and identity. The thing that is mind blowing is the extreme apathy, complacency and lack of indignation by the majority of the citizens of the aforementioned states.
Excellent work Jorge!
You must have put in a lot of graft and should feel proud.
Old Chine Proverb –
Man with no shoes must weep for man with no feet
My 21st Century Proverb –
Semi-autonomous dominions dependent on the energy resources of a fully-autonomous state should not bite hand that feeds them.
Is the practice of involuntary assisted euthanasia legal in Europe?
Thank you pal, your words always encourage me lots.
I obviously need them you know, specially at my old age now (pushing 75 already…) almost good for nothing for most everyday company, only good for reading the computer screen for long hours. So go figure…
Yes WTFUD, I´m not ashamed to confess that I actually do feel proud (and thank you for reminding me !)… having complied with my “mission” (sorta) in life just as my parents and grandparents and teachers wanted me to… and educated me for. My problem is I´d rather give away feeling my own pride so much and instead have significant others — family and friends — feel just a weee little bit proud of me… but they don´t … or don´t care as it´s only the future of mankind we are debating here you see. Consumer society at it best, ya know.
So, such is life: it´s a bitch and then you die.
Cheers everybody, we shall overcome.
Thanks again WTFUD
Well unless you photoshop your image , like my estranged wife does on social media then you look very sprightly for your years. I’m a few decades younger but we look age mates. I wish I hadn’t hung around the bars, casinos and strip joints in my informative years. lol
Regarding, don’t leave the grandkids with grandad he’s tinfoil (reading between the lines ), I was the only one who hung on to mine’s every word, I miss him badly. At 15 years old he would talk to me about 5th & 6th columns in Russia. Funny thing is my own family & broader family ask my advice on almost every other subject, not to mention the never to be paid back loans. Go figure!
Look forward to your next hit piece.
Great article, loved the train of thought and the extensive references.
As many point out, there seem to be not stupid politicians, but an purposefull, implicit and determined will to trigger if not the, at least a, great reset.
E.G. the empl pipeline, that connects argelia to spain and portugal, and that for over 20 years provided natural gas there, seems to have got into serious troubles because of disputes between argelia and maroc.
The situation is so bizarre, that i havent even managed to find out if the pipeline is delivering gas right now, and there is 0, one could even say negative values, of information or discussion provided for such a critical asset in todays conjucture in either spain or portugal.
Thanks anodinous !
And, yes, References do require time, focus, and effort….
But your comment reminds me that References are worthwhile indeed.
And if I had more time I´d look for more varied References also.
But it´s a tricky balance that needs to be struck: you don´t want to bore the audience with too many References either, right ? Still, References can and do take time.. but they are essential, I true that my friend !
Will the German government continue to transfer energy to Ramstein’s American base at the expense of its people and its industry?
Sounds like German socio-political ´high friction´ would come up instantly, wouldn´t it ?
Up until not that long ago everyday Germans deeply disliked Americans because of WW2 events.
But then on the other hand if Ramstein is not powered-up enough what sense does it make to have it ?
Operationally, with fuel scarcity Ramstein would close down being yrt another reason behind the Rusian oil ban checkmate process mentioned in the article at the very end if I recall correctly.
My fantasy is that Russia use the occasion of Victory Day to declare all unfriendly countries that have sent arms to Ukrained= co-belligerants and implement an immediate total ban on commodities exports to them. This would exempt only Hungary and Serbia (Austria too?) in Europe, and it would probably be a crushing blow for Japan as well. Much of the losses Russia would incur through decreased sales could be made up for by increasing domestic use of commodities (such as happened already by diverting half of Nordstream 2 gas to NE Russia) and higher prices for exports. Europe would then have to choose between imminent economic implosion or agree to cease all aid to Ukraine and, in addition, agree to restore the billions it stole from the Russian central bank and other Russian organizations and individuals.
A lot of people seem very anxious and disappointed because Russia has not completely shut off all the gas, oil etc. to western Europe. Putin is a very patient and calculated leader and the Russians have played out every possible scenario. I for one am thoroughly enjoying the living daylights out of what Putin is doing to the EU and NATO by forcing those puppet governments to pay for gas in rubles. Not only is the EU strengthening the ruble every single day by paying in rubles for gas, but at the same time the Euro is nosediving. The other thing to remember is that Russia is building new pipelines that will flow more gas to China and they should be operational by 2024. Once the new China pipeline is functioning then Russia will have no real incentive to supply Europe with energy. Europe will become even more obsolete to Russia and to the emerging economies of the world.
Could you please share with us any sources or References relating to pipelines to China?
This is an excellent article, but there are some potential positives for European Countries, to shake off the Malthusian net zero lunatics, who seem determined to crash the entire economic system, and massively depopulate (commit mass genocide of their own people) by all means available which they think might work.
I admit that most of this is being driven, by so called “elite” reprobates, from within the UK, and the USA.
Their basic problem, is that they don’t like people, and want to get rid of as many of us as they can. Race, religion, colour of your skin, is irrelevant. These lunatic psychopaths, just want to kill.
They do not want things to get better, they want things to get considerably worse. They thought they were doing well, with their covid jabs, and their propaganda (which I admit these evil bastards are brilliant at – far better than the Soviets, or even the Stasi) – but their agenda is pretty much the same.
They want to kill, both you and me. Like George Carlin said – They are in a Big Club, and you ain’t in it.
At the moment the full blown kill show, is very much on the road, and the SLUGS think we haven’t noticed, which currently is largely true.
But when the lights go out – no TV – no internet and no 3 meals and a bed, people are liable to get extremely angry.
I personally, am not into Revolution. I still believe in the Law, but it is not hard to identify, who the real evil criminals are, and produce a list, for them all to be lined up, and tried for war crimes against humanity (that is us) in a human court of law.
There is no shortage of energy, and there is no shortage of food.
Increasing levels of Carbon Dioxide is not a problem. It’s Plant Food. The climate has always changed and always will. Us humans adapt to it exceedingly well. Always have and always will.
The problem is these lunatics currently in control.
I have been against the death penalty all my life, but have now changed my mind, for “elite” criminals found guilty of mass genocide, in a fair court of law – with a jury, who have recovered from being brainwashed by the incessant lies and propaganda, from the evil (exceedingly rich people) determined to destroy us, our children and grandchildren.
I hope The Saker is O.K. I don’t always agree with him, but think he is a good man, who provides a very important resource.
One point the author seems to have missed. Suppose the EU does the most stupid thing thinkable and bans Russian oil which then causes Russia to ban all exports to EU. The EU will crash and take with it world economies. The great migration mentioned will occur but where will these migrants head??? To EU?? No, EU is a disaster zone, they will most likely head to Asia and Russia. That will cause chaos in these regions as neither is prepared to accept millions of people from vastly different cultures. Same problem in North and South America, where will migrants go?? The economies of both North and South will be in ruins. This problem is hardly just a EU problem even though it is clearly a EU and US caused problem. The smart play would be for the people of the EU and the US to rise up and take down the idiots in control. In the US this will most likely happen in November, not so sure about the EU.
Ips Prez, thanks for your most valuable input while thinking out loud.
You are not ashamed of critics, so that´s my man and I´m 100% with you guy !
Your thinking helps lots, even if you turn out to be incorrect… or partially incorrect…
The truth of the matter is that the EU already has doubled and tripled down on the Russian oil mad ban.
So the basis of your thesis is perfectly correct so far !!
Though we still can´t know how, when and what will happen hereafter.
So you may well end up being 100% correct in everything you say (or not)
Still, your points are very well taken Ips.
Ips lemme try a shot at what you posit.
(A) you know it, I know it, the Russians have known it for years now. So…
(B) if the EU gets to a Russian oil ban my best guesstimate is that Russia will act as per Point (1) of the “asymmetrical non-military retaliation” paragraph at the very beginning of the article. That means executing some ´surgical and divisive optional sales of natural gas – and other key commodities – just leaving the EU sanctioned Russian oil for sale to and re-sale by third parties´. That is, Russia will not shut down and close off all exports to the EU as you suggest, the same way they are not destroying all of Ukraine just for the sake of it. The idea is to cause just enough trouble to make the EU reason out the logical outcome which is “bite the Russian bullit” Guys we won, you lost. And if the EU political class needs to be replaced, so be it.
(C) per point (1) of the paragraph on ´Russian leverage´ mid-way into the article, Russia does not want, let alone need, to defeat all of Europe. Just turning Germany — or Poland for that matter — into a messy mess would be more than enough for the whole EU to focus and reason out basic stuff. And that´d be easy enough for them to achieve, you follow ?
(D) the Russians would most probably want the EU to change on their own and they certainly do not want the EU to really CRASH out. No trading partner would exist if that were the case. So Russia does not want that, it´s not in their best commercial-financial interest. Them Russians are smart cookies you know. They want a healthy enough Europe to survice. What they do not want is aggressive capabilities on their borders.
(E) some migrations would take place anyway, but at border scenarios Russia is somewhat protected by its military and mostly by pure natural geography and climate. This is history. Grab a physical map and take a look, including the major rivers and seas to be crossed and the Carpathians mountain range.
I am convinced that the migrants will suffer greatly but mainly will necessarily remain in Europe, or what´s left of them I mean (sorry)
Germans at a loss, dumbfounded, not anywhere close to the Germans we used to know.
No compass, no sense of reality, nothing.
Maybe they´d get Angela Merkel back soon enough ?
Dear Mr. Vilches,
Thank you for another great article! In fact this is one of your best and most comprehensive summaries of considerations omitted daily in other discussions re ongoing economic war. The key references are much appreciated.
I work in the oil industry and support your circumspect analyses based on 30 years experience. Also advise the skeptical readers of this article to read it slowly and carefully, using thought instead of impulsive emotions.
The EU economy without reliable sources of energy and raw materials (both in terms of quality and volume) is simply dead.
8 years ago Vicky Nudelman was relatively quite gentle and restrained when off the cuff she told Pyatt in 3 words what to do about the EU compared to what EU did/does to itself these days.
Renewable energy is so far the equivalent of an “expensive spice” (priced at Spanish Saffron level compared to kitchen salt – mas o menos), but far from main feedstock. And unlikely to ever become one…
Oil and gas is way more than fuel+heat+fertilizer … the petrochemical industry is indispensable part of life in the last 100+ years. I reckon you didn’t want to get into this “tidbit”, which is fine.
What I cannot fathom is why are many EU members biting the hand that feeds them reliably and cost effectively for over 7 decades? What kind of economic school prescribes ditching reliable and cheap sources of energy and raw materials based on emotional whims (i.e., ethno-phobia). Imperialism was all about acquiring control over the cheap and reliable resources of other countries/nations…
Recently we had mental illness days or weeks in Canada .. post Covid stuff, you know.
Is there a mental illness pandemic going on now in the combined west (zone A?)?
NS-2 was alleged by its opponents to be used by Gazprom for “weaponising the gas supplies to Germany”. And today Germany is “threatening” to ditch the Russian gas supplies. Mind boggling stupidity on both ends.
– keep up the great work and thank you for joining the Saker Community of Authors. Always looking forward to your next article.
– to your “critical readers”: try to write 1/10th as good an article as this one just for fun in your spare time, and then we’ll respect your opinion
Thing is SK, all these Euro-trash countries feed off the same colostomy-bag drip as the Federal Reserve. All bankrupt entities. Non-compliance with the Gatekeepers (well you’ve seen how Greece’s borrowing costs tripled when Alexis Tsipras PM expressed dissent – Yanis Varoufakis gave testament after the Troika meetings of his capitulation ). In a nutshell America has the Euro-trash by the toy-dolls.
Your favorable comments are highly encouraging and most appreciated, trust me.
Of course, and as you´ve probably figured out already, I actually need them !
Yes, this is a very tough and a very lonely task as you surely know by now.
Feedback such as your are my only real reward.
SKovacs your technical input and decades-long expertise will always be very well taken, so please feel free to jump in anytime and set the story straight for all of us. I also wish and need to be educated no matter how much grey hair keeps showing up on my clumsy head. On my side I have very strong yet very widespread technical background including oil & gas & mining know-how but nothing as specific as may eventually be needed to adequately judge the possibilities at hand. The specific topic now is an EU ban on Russian OIL…
As you correctly say, another aspect is that Russia is a proven, reliable, well-known all around vendor / supplier. Don´t even try to find any other all-around equivalent vendor out there. For all the money in this world, I would not want to be working — not even as a consultant — for the Procurement Dept. of any company (European or otherwise) for the rest of this decade.
You are also correct in saying that I did not get into petrochemicals for reasons of space.
Freight impact details would also be pertinent, and the political role of Greece, Malta, and other EU members directly and negatively affected as shipping freighters. Some knowledgeable posters such as yourself have mentioned this aspect in passing, but it´d be nice to know much more.
By the way, I confess not being that sure I should interact much with readers as no other authors seem to be doing it. But my instincts and ´life or death´ circumstances strongly push me to the screen + keyboard if no grandson is around. What can I lose ? I will surely learn some more from readers and in the event of making a little bit a fool of myself well that doesn´t bother me that much…
I also try my best to focus on all-essential References and actualy could have plenty more to add. But methinkx I should not risk boring the audience with too many References which require their reading time and their effort, right ? What do you think SKovacs ? Yeah, I know, it depends on who the audience is I guess…
I also use sarcasm to make the reading more colorfull and lively.
Sometimes this may not be interpreted the way I intended it, but that´s something I´ll have to learn to live with.
But my underlying message is always utmost serious trust me, not a single joker in the deck really.
I also know that my colloquial wordcraft means running the risk of being considered some sort of “populist” columnist… but at my late age quite frankly I only care to produce a lively reading… and to be criticized. So the tougher and the deeper the criticism I get the more I´d learn, so be it.
Best regards SKovacs and please share with us all your ideas and feedback you may have for us.
Your valuable input is most welcome and appreciated.
Dear Jorge (may I call you by your Christian name?),
Other than the clear and important thoughts you present I -and many other readers- respect your professionalism and rare humility.
As all authors and lecturers know, it is impossible to please every member of the audience, which is not even an end goal (unless one is a demagogue propagandist).
Enjoy the solitary moments when you can gather your thoughts, synthesize and share with us. Most of us here are ESL, and tend to understand all authors.
As for style: – these are blog sites used for exchanges of ideas, sharing food for thought, sources of valuable information that may be hard to find in todays colossal deluge of e-junk. These are not encyclopedias; therefore, there is a great degree of flexibility in presentation style and completeness of material. Errors&omissions insurance is not req’d to discuss a topic or another on these pages :) But the key is the Discussion… Your openness and willingness to engage with readers in meaningful discussions is much appreciated.
References: – I would include the key original sources. Inquisitive readers will love them, the rest doesn’t matter, really.
Back to the suicide pill = proposed EU oil embargo on Russian oil: – my notes below are only meant to complement your summary, and may not be all news to you.
– Many EU refineries have been built to process certain types of oils shipped from Russia/frmr Soviet Union. The very design&build of these refineries (and petrochemical plants) was based on certain oil types within narrow variation in blend/quality and steady supply (variation normally of less than 15% vol/day) guaranteed for over 30 years (most commonly 50+ years). Continuous supply of oil is critical to the operation of a refinery (or any chemical plant!)
– Adapting a refinery to new types of oils is not as easy as changing a screw driver head from Phillips to Robinson… Every adaptation of a chemical plant/refinery/ore processing plant requires first detailed knowledge of the new blend, guarantees for its continuous delivery for decades!, convoluted & lengthy contracts and procurement processes, extremely detailed engineering plans, manufacturing of parts, shipping, installation, testing, commissioning, optimization, permitting etc before it can be called fait accomplis. Any element of this incomplete list if missing renders the whole affair a failure both technically and economically!
– This all assumes guaranteed efficient and continuous shipping and receiving network(s) are in place and operational!
– Such work involves thousands of people, complex processes and of course billions of dollars/euros or equivalent other currencies, regulatory permitting process, inherent lawsuits etc. = A LOT OF TIME – years!
There was talk about LNG deliveries by US (or affiliated/approved) companies to EU… (the source may not be fracked shale gas from the Permian, it could be from anywhere!). But the EU needs several LNG terminals to receive and process liquefied natgas. The sites have to be carefully chosen, their environmental impact assessments completed (can take 5 to 15 years!), engineering design can take years (limited room for direct carbon copy of other designs), ground preparation construction 1-2 years; manufacturing of plant and modules (usually in Korea and China) needs contracts, capacity, materials, etc… lots of time and shipping. By the time all is said and done, ~15+ years went by. (this is first hand knowledge…)
All LNG terminals are owned/built/operated by consortiums of gigantic multinational companies, not governments! They cost 10’s of billions US$ to build, which needs to be borrowed from banks. The borrower must prove that it has a solid plan with guarantees in place to repay the loan with interest. The owner/operator of the terminal has all sorts of other liabilities.
– Thus far I haven’t seen any candidates (Shell, BP, Mitsubishi, Total, ENI, etc) line up in Brussels volunteering for the job pro bono, nor any banks handing out billions as charity for this endeavor.
European countries are extremely bureaucratic, plus the Brusselsprouts dump another thick blanket of rules of compliance… So say ~20 years to have 1 LNG terminal ready where this is possible and not vetoed by the local council… Meanwhile, a pipeline must be connected from the terminal to existing grid… further complications at every level. What capacity should these terminals have and the related new pipelines? nobody knows.
Are there enough special ships available to carry LNG? not really… how long and what does it take to build ONE? we need a few dozen more for sure… Who’s going to build it?
EU deprived of oil/gas/metallurgical coal from Russia and iron ore is unlikely to build much. Never mind the finer components that require other metals also provided by Russia…
None of this is factored into the ludicrous process unleashed on the world since late February.
All the above and most of the economy in the EU is run by publicly traded or private companies, not by eurocrats! They may survive short periods of break-even cashflow, even short negative periods, BUT if the fundamentals of their existence are denied by the introduction of some sudden law/decree, they will implode instantly.
So these western mouthpieces from EU offices may think that a policy decision can be uttered in a 10 minute press briefing, and by the time they leave the podium the whole world adapted/changed/built etc.
Yet all they have achieved is the derailment of a super heavy freight train moving about on a carefully planned and built track system under existing contractual agreements that ensured the relative well being of everyone living around it. Every derailment is a tragedy. What we are seeing now is the most colossal tragedy perpetrated on EU, with serious complications to their global partners/colonies etc..
The EU population should fear its own home grown biological WMD’s = unelected bureaucrats and idiotic/corrupt elected officials (bar a handful of decent patriots e.g., from Hungary), whose destructive policies and decisions reach directly & indirectly the smallest village or hamlet within their jurisdiction regardless of shape and extent…
Sorry for the lengthy rumble. Got a bit carried away.
Dear SKovacs, no, you didn´t make it a “lengthy rumble” at all !!!
And please keep it as lengthy and detailed as needed per your own valid judgement as you would know better than 99.99% others. Much appreciated, because otherwise it´s just one opinion vs. another equally valid opinion. While instead, you establish a highly knowledgeable technical basis against this nonsensical idea of substituting Russian oil as if it were a simple, quick task.
Now, with your solid argumentation full of operational details, the problem is far better defined and necessarily better understood than by just stating conclusions as I have done, no matter how right those conclusions may have been. Them still lacked the profound technical basis which you input.
And no, SK you didn´t get carried away, you are just making a most valuable contribution for top EUrocrats to listen to very carefully !!! Now, I´ll try to bring it home.
(1) Please by all means call me Jorge, or even Georgie as some friends do, as you like it.
(2)SK… I probably have less than 1% of your specific experience on these matters.
(3) Still, I knew I was “right”. What I didn´t know is how much “right” I was per your now specific proof / experience presented to all of us.
(4) SK now you are “obliged” (sorta) to prepare a draft piece pretty much repeating and expanding all of the above. You can email such to Amarynth now the current sitting Editor of “The Saker” in Andrei´s absence. The idea would be for European decision-makers to eventually read you (more on that later) and thus learn how dangerous their ban-the-Russian-oil experiment will turn out to be for Europe and the world at large.
(5) Once your draft is submitted, there are two possibilities.
(5a) that “The Saker” approves your draft as is for direct publication
(5b) If you agree, I could add my own thoughts and make it a “joint” effort meaning we´d be co-authors of a future “The Saker” article. The final draft shouldn´t take too long to prepare methinkx.
Amarynth´s email address is : [email protected]
If you agree, Amarynth surely will share with us our respective email addresses and from there we can connect directly between us two, work-out the final draft content and massage the wording, etc. etc.
My “The Saker” articles have been RE-published by many specific blogs reached by European leaders who later contacted me. Please read my new post at the very end of this commentariat thread explaining the situation. So our possible future piece would have the right audience guaranteed, I promise.
Please think about my proposal and I´ll fill in Amarynth about it.
I am convinced it is worthwhile our effort as you seem to be highly knowledgeable and an experienced author probably published many times already.
Please be advised that I have just formally authorized “The Saker” staff to let you know my email address.
Now we need you to do the same regarding yours.
In Andrei´s absence, Amarynth is now the sitting Editor at [email protected]
Of course, as soon as you get word, please just write me a short message acknowledging such and we´ll take it from there.
Every second generation of Western Europeans attacks Russia.
There are different excuses, of course. Jesus. Czarism. Human Rights. Communism….
But it’s instinctive. It’s just what we do.
This time, however, Russia is ready and we’re not.
“Every second generation of Western Europeans attacks Russia.”
I think this is the essense of all of this. Decisions may looks stupid in the short term, but makes more sense long term. Western Europe is being mobilized for war again, once more as foot soldiers for the Empire. Waiving the Rainbow flag intending to cancel the wokophobes. It’s like being attacked by a lunatic asylum this time.
– Western Europe is being mobilized for war again, once more as foot soldiers for the Empire
Today there is a desire to ban anti-vaxxers. What traits of Aussies and Europeans are causing this desire??
We can all laugh at Victory Day like John Oliver. Then the last 8 weeks Russians have learned everyhting they was taught at school is true
Excellent breakdown of a complex situation. I work in an oil/gas adjacent industry and even my limited knowledge is enough to know that it’s not something you change in six months or a year without massive national mobilization of effort.
I’m coming to the conclusion that stupid or evil isn’t the right question. Obviously it’s some of both but there’s more. There are now two generations of “leaders” in the west who’ve never faced a consequence for their actions. They’ve come to believe that there are none. “It will always work out somehow” is good enough for these people. Second, western politics is so media driven that leaders make decisions based on media input and media coverage of their decisions. Actual intelligence, analysis or policy are secondary to media.
So even if someone in these governments is writing memos pointing out that it doesn’t work the way the leaders want and “banning” Russian oil will just make for more complex and expensive supply, the leaders won’t listen. What’s important is to tell the media that you’re banning Russian oil. See above, it will always work out somehow because they stopped believing in consequences.
Thanks for your kind words Lex.
And your description may very well be — at least part of — “the” effective explanation to so much nonesense put together we all can´t yet figure out. Sometimes I think that the final outcome of this nightmare will be even worse than if planned and implemented on purpose. Suicidal, self-destructive Europe, how come ? what for ?? I dunno.
For starters, Ukraine itself will end up demolished.
So this idea of picking a fully unnecessary violent all-out fight (war) with über-powerfull Russia can only have a very illogical explanation we are all trying to find by reasoning, to no avail. So you may very well be on the right track Lex.
Germany officially warns of global famine with full details of Germany´s role in creating such world famine…
Of course one possibility — today seemingly a bit far-fetched maybe ? — is for the EU to break-up as a result of the visible mis-management led by Ursula et al. The corresponding impact will be very strong and may just reveal the enormous internal problems within the EU, the euro itself, etc.
Germany would benefit greatly by joining the Russia-China axis but the current leadership would not dare to pull that. Possibly, in view of coming “defeat” and with a 180 political change the Germans may leave the EU though. Just sayin´…
If the current ideology prevails, then Hungary, the Czeck Republic, Slovakia, Greece, Malta and Cyprus will be harmed greatly and probably will not endorse the sanctions.
Thank you for a comprehensive and easy to read overview of the lunacy that is representing the EU. It is unfathomable to see why it is still proceeding, but it is.
Each week / day seems to present another opportunity to break something.
What has been just a disturbing is the lack of main stream media coverage or critique of the antics of those who govern. Cannot see how there will not be an uprising / riot/ or apocalyptic revolt by the EU public when the penny drops.
The Russian government has shown their class, wisdom and humanity – something we have been missing here in Anglosphere. The Russian team appear to have been been 10 moves ahead and measured in their actions which has probably saved us all from needing iodine tablets.
Full trust and respect for the Russian people in charge of dealing with this world impacting event.
Old Grey Dookie, thanks for your acknowledgement.
I agree with your valuable points
Świetnie wypunktowane zagrożenia dla Europy i USA.
Moje dwa grosze to zwrócenie uwagi na sytuację BRICS.
Mają dwa kluczowe czynniki.
Energię z własnych źródeł i samowystarczalność żywnościową na poziomie organizacji.
Mogą rozegrać to na swoja korzyść, stosując upusty cenowe krajom zaprzyjaźnionym, ozwalając płacić w walutach krajowych.
W ten sposób mogą zyskać nowych członków, wspomóc kraje rozwijające się- co przełoży się na wpływy polityczne, wyprze wpływy Zachodu.
Ludność tych krajów będzie wiedziała komu w dobie chaosu zawdzięcza pomoc.
Bez energii, nie ma cywilizacji.
Co zdaje się nie dociera do europejskich decydentów.
Świetnie wypunktowane zagrożenia dla Europy i USA.
Moje dwa grosze to zwrócenie uwagi na sytuację BRICS.
Mają dwa kluczowe czynniki.
Energię z własnych źródeł i samowystarczalność żywnościową na poziomie organizacji.
Mogą rozegrać to na swoja korzyść, stosując upusty cenowe krajom zaprzyjaźnionym, ozwalając płacić w walutach krajowych.
W ten sposób mogą zyskać nowych członków, wspomóc kraje rozwijające się- co przełoży się na wpływy polityczne, wyprze wpływy Zachodu.
Ludność tych krajów będzie wiedziała komu w dobie chaosu zawdzięcza pomoc.
Bez energii, nie ma cywilizacji.
Co zdaje się nie dociera do europejskich decydentów.
The threats to Europe and the USA are well outlined.
My two cents is paying attention to the BRICS situation.
They have two key factors.
Energy from own sources and food self-sufficiency at the organizational level.
They can play it to their advantage by discounting prices to friendly countries, allowing them to pay in national currencies.
In this way, they can gain new members, help developing countries – which will translate into political influence, and will displace the influence of the West.
The people of these countries will know who they owe their help to in times of chaos.
Without energy, there is no civilization.
What does not seem to reach European decision makers.
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The author clearly doesn’t understand that the EU, and its US and globalist puppet masters, WANT all of the disasters which the author thinks that they don’t want!
The global cabal, which controls all Western governments, WANTS the prices of oil, gas, food, fertilizer etc. to go through the roof – so as to cause food shortages, but also to provide the Narrative as to why Western economies are going to go into free fall.
The globalists installing the Great Reset absolutely require a cataclysmic economic and financial collapse, and a feeling of absolutely desperation among the masses, so as to hold out their Great Reset tyranny as ‘the only solution’ to their populations.
Only if the peoples of the West are absolutely desperate, will they agree to the installation of tyranny which is the agenda of the global cabal.
So, in a nutshell, if you were correct, it´d be purposefull suicidal self-destruction, right ?
So let´s stop them then !!
In the past, Zero Hedge and other important blogs have RE-published my “The Saker” articles same as with other “The Saker” authors.
This time around Tyler Durden — without my knowledge let alone my consent — has added my name to the title, something which I do not share and was obviously not part of the original “The Saker” article being RE-published by Zero Hedge. Because this is not about me at all. This is about the future of mankind as we know it, and with “The Saker´s” help, I´m only trying my very best to trigger an intelligent and commonsensical discussion — surely most IM-perfect — and merely as a starting point.
We should all still be very proud of this (and other) RE-published “The Saker” pieces.
Congrats to Andrei and Amarynth… and the commentariati !!
And please do keep up critical comments so we all learn, specially myself.
Also, as in previous ocassions, Raúl Ilargi Meijer´s “Automatic Earth” has RE-published this “The Saker” article at his “Debt Rattle” https://www.theautomaticearth.com/2022/05/debt-rattle-may-9-2022/
Take care folks.
I strongly disagree with the assumption that von den Laien is intellectually blind. She may not not be the brightest, as any politician is, but she isn’t dumb either. All that happens is fully intentional. Following the agenda of Schwab’s WEF and its ilk. Think about it: if Brussels or Berlin or most other european regime were idiots, then we would see disagreement and erratic movements in different directions. But this is not what’s happening. After Covid the Ukraine conflict is exactly what the Davos crowd needs to implement their plans. The ones who are really dumb are the masses the massive damage is inflicted upon while they are happily agreeing.
Very good point.
That is true for Ursula. A good and willing lackey.
But – just to give an example – Annalena Baerbock is clearly intellectually – let‘s say – underdeveloped. As it is true for many if not all of her Green and Socialdemocratic Comrades.
Or the German minister of Health – a very easy to identify psychopath.
The chairwoman of the parliament: a TikTok-childsongsinger, sometimes a bit troubled, according to herself.
That is the Germany of nowadays – the good people (there are some, of course) do not think for a minute to join any kind of party OR administrative career. It is not bearable. Impossible. An insult for your intelligence.
And so it goes ….