Energy inflation continues to pummel all western nations as they chase the climate change agenda. Today, the European Central Bank has raised interest rates to support the goal of lowered economic activity.   Lowering economic activity lowers energy use.

Absent of any desire to raise energy supply and/or energy production, monetary policy can support the goal of lowering energy use by driving down all economic activity.

In the big transition picture, the economies within the western alliance must be reduced until they match the energy output of windmills and solar farms.

FRANKFURT—The European Central Bank raised interest rates by the largest amount since the early days of Europe’s currency union, moving aggressively to combat record inflation even as an energy crisis puts Europe on the brink of recession.

The bank said in a statement that it would increase its key rate to 0.75% from zero—its second hike this year following a 50-basis-point rise in July—and signaled that further rises were likely over the coming months.

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According to the U.S. Energy Information Association (IEA), U.S. storage of Liquified Natural Gas (LNG) is 12% below the five-year average (LINK).  Additionally, the IEA is expecting the U.S. to export 11.7 billion cubic feet of LNG per day during the fourth quarter of 2022 — up 17% from the third quarter. The destination of that export is Europe.

Consider that 43% of U.S. households use LNG for home heating, and power suppliers use LNG to create electricity.  With the massive 2022 exports of LNG to Europe (+17% in fourth quarter alone), that means lower domestic supplies and increased prices here in the United States for electricity and home heating.  We are seeing and feeling these massive price increases right now. As a result, consider this reality….

Not only are U.S. taxpayers directly paying for the majority of costs in Ukraine, but we are also subsidizing the European Union by exporting LNG and driving up the price here at home.

We are directly paying Ukraine, and indirectly paying Europe to maintain gas sanctions against Russia.  This is the reality of the current situation as created by the Biden administration.

Now, consider this.  The President of the European Commission, Ursula von der Leyen held a press conference in Brussels today, announcing five initiatives to contain the expensive EU energy crisis: “The goal is clear. We must cut the revenues of Russia that Putin uses to finance this atrocious war against Ukraine. And now our work is paying off. At the start of the war, gas from Russian pipelines accounted for 40% of all imported gas. Today it has dropped to only 9% of our gas imports. These are tough times. But I am convinced that Europeans have the economic strength, the political will and the unity to maintain the upper hand,” she said.  The United States and Norway are the primary suppliers of gas to the EU to fill the void.

Commissar von der Leyden’s five initiatives include:

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German Minister of Economics Robert Habeck is under fire after his comments during an interview with an ARD broadcaster on Tuesday evening.

The conversation surrounded the astronomical rise in the price of energy taking all the income away from people who would purchase other goods and services. As Germans no longer can afford purchases, the stores and businesses can no longer operate.  Minister Habeck was asked if that means a wave of bankruptcies and business closures are forecast.

Mr. Habeck responded that businesses can stop operating, but that doesn’t mean they will go insolvent.  Just because the business loses most or all of their revenue, doesn’t mean they will go bankrupt.  That doesn’t make sense, Minister Habeck was pressed to apply commonsense. If businesses close to save money, workers are not employed. If workers are not employed people do not earn income.  If people do not earn income, the economy worsens.

Habeck had no response other than an economically detached “Green Party” perspective that businesses will not go bankrupt just because they are not operating. However, his facial expressions reflect that he knows what comes next, total economic collapse. WATCH: 

https://youtu.be/x8bGPxZfIdQ

(Reuters) – German Economy Minister Robert Habeck faced a backlash on Wednesday for saying he could imagine parts of the economy stopping production due to rising energy prices that German firms say are threatening their existence.

Asked whether he expected a wave of insolvencies at the end of this winter due to companies’ rising energy bills, Habeck said “No, I don’t. I can imagine that certain industries will simply stop producing for the time being.”

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On one hand losing the ability to manufacture aluminum is bad news for any economic activity that requires the use of aluminum.  However, on the other hand, this politically guided ‘new world’ we are going toward doesn’t need aluminum, because you cannot eat it.

Predictably 2023 is going to be the beginning of several ‘Build Back Better’ decades where the ownership of material things disappears.  When your wages are focused on sustaining yourself with housing, food and energy, all of those other purchases become mere indulgences.

Sustainable life in equity with the needs of the planet, means returning to the era when you received an orange or a piece of chocolate as a Christmas gift, and you are thankful. Cars, appliances, phones or other types of luxury durable goods are indulgences which become out of reach for the worker class.  Thus, removing smelters, iron works, factories and other heavy industrial machines only makes sense.

As meager wage earnings are focused on purchases to sustain life, there is little room for indulgences.  As the World Economic Forum has stated, we will own nothing and we will be happy.  Happiness experiences will be provided and the virtual metaverse will fill our needs.

LONDON, Sept 1 (Reuters) – Two more European aluminium smelters are powering down as the region’s energy crisis shows no signs of abating.

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What is predicted to happen in Europe is just stunning, literally stunning.

♦Context – According to official data from the World Bank, the combined Gross Domestic Product (GDP) of the European Union was just over $17 trillion US dollars in 2021. That is the last calculated measure.  The combined GDP value of European Union represents roughly 12.78 percent of the world economy.

According to analysts for Goldman Sachs, the current energy crisis in Europe has increased electricity prices at a rate that is increasing almost daily.  Within the data it is now estimated that households within the EU will pay an additional $2 trillion for electricity in the next year.

Put that $2 trillion into context with their GDP, and that scale of energy cost would be wiping out 12% of the purchasing strength within the total EU economy.  Forget about buying anything else, if this analysis is correct Europeans will be buying food and energy, nothing else.

If you consider what that means, it is bordering on full economic collapse of western Europe.

What is being described above is what we posited when we outlined the impact of the “Energy Economy” {Go Deep}.  When you suck 12% of the purchasing power out of an economic engine simply to maintain the status of current energy use, everything else starts to collapse.

Also keep in mind we are only talking about the direct impact of $2 trillion in electricity cost.  The downstream consequence is far greater because everything created, produced, or manufactured, including food, is dependent on electricity – which will drive the final cost to produce of all those products even higher.

The damage is almost unimaginable in scale.

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Well, it looks like it’s official now. After several days of sporadic reporting on Russia’s decision to shut down the Nord Stream 1 natural gas pipeline into western Europe, it looks like the valves have been shut down until EU sanctions against Russia are removed.

Strategically the Nord Stream 1 pipeline is the major gas supply route into Germany, Europe’s largest economy. As noted by Reuters, “European gas prices, as measured by the benchmark Dutch TTF October gas contract, rose by as much as 30% on Sept. 5, amid growing fears of a total shutdown of Russian pipeline imports ahead of the European winter.”

Europe was already going into a deep economic recession due to inflation created by pre-existing green energy policy.  The Nord Stream shutdown will make things exponentially worse as energy prices skyrocket.  The Russian owned energy company Gasprom sent out a video that can be best described as psychological warfare.  WATCH:

https://youtu.be/n2b_0gfV_4E

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During his opening monologue tonight, Tucker Carlson becomes the first mainstream pundit to point out the lies in the central bank argument.

The federal reserve and EU central banks claim they are raising interest rates to stop inflation by slowing demand.  A demand side approach.  However, it isn’t demand driving inflation; it’s the cost of energy driving inflation. That’s a supply side issue.

The central banks cannot admit what they are doing, or people would catch on.  They are intentionally reducing economic activity in order to support having scarce energy production. WATCH:

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As the global cleaving begins taking shape based on the new western energy system, the Build Back Better agenda, Russian energy exports are worth a lot more money.  As a result, the Russian economy has gained more wealth than before the western sanctions regime was triggered.  As noted by the Wall Street Journal:

(Via WSJ) – […] Demand from some of the world’s largest economies has given Russian President Vladimir Putin the upper hand in the energy battle that shadows the war in Ukraine, and has confounded the West’s bid to cripple Russia’s economy with sanctions.

Sales are booming in Russia’s export market, the world’s largest in crude and refined fuels. And new trade arrangements have given Mr. Putin cover to use natural gas exports as an economic weapon against Ukraine’s European allies. Before the war, Russia supplied Europe with 40% of its gas. It has since throttled flows through the Nord Stream pipeline to Germany and other conduits, driving prices higher and putting pressure on European households and businesses.

Oil revenue more than makes up the difference. “Russia is swimming in cash,” said Elina Ribakova, deputy chief economist at the Institute of International Finance. Moscow earned $97 billion from oil and gas sales through July this year, about $74 billion of that from oil, she said.

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An additional perspective on the current status of the Ukraine-Russia conflict from Retired Lt. Col. Daniel Davis.  WATCH:

A strong point made from the mailroom, adds perspective toward why the British are disproportionately taking on the responsibility for the European war machine inside Ukraine.   It has been noted the U.K. government is doing much of the training, arming and support for Ukraine from within the EU.  The question becomes, why was Boris Johnson and the British government so ‘all-in’ with their full-throated military support?

Perhaps the answer is as simple as the London financial markets. “The UK has nothing left but those sketchy money markets and exchanges. The Russians, joking at the sanctions, pricing resources in rubles, working with BRICS, are an existentialist threat to the UK. It shows that the financial exchanges and trading houses based in the UK are paper tigers because they can be easily bypassed. Russia is indeed an existentialist threat to the UK.”

It’s a good point.

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Retired Admiral James Stavridis was the former NATO Supreme Allied Commander who conducted Secretary Hillary Clinton’s war in Libya without congressional authorization.  Stavridis represents the military side of the State Dept war machine, while Michael McFaul, former U.S. Ambassador to Russia, represents the diplomatic side.

Hopefully, more Americans are awake now to the nature of U.S. foreign policy as it relates to who controls the use of our military.  Most modern interventions are conducted from within the U.S. State Dept using joint elements of the CIA that operate within it.  The State Dept and CIA now control all pentagon operations and direct U.S. missions.

Once we accept how this modern process of global influence works, then we understand how and why Mike Pompeo moved from CIA to State during the Trump administration.  Pompeo was the ‘mitigator,’ the person installed to block President Trump from interfering in this construct.  What Bill Barr was to the DOJ, Pompeo was for the State Dept.  It’s always uncomfortable to look at the Deep State with clear eyes.

As you review the propaganda; and there is no doubt this is pure propaganda as pushed by NBC today on Meet the Press; keep in mind that U.S. operators are deeply embedded inside Ukraine to facilitate goals of the State Dept proxy war against Russia.  New York Times – … [E]ven as the Biden administration has declared it will not deploy American troops to Ukraine, some C.I.A. personnel have continued to operate in the country secretly, mostly in the capital, Kyiv, directing much of the vast amounts of intelligence the United States is sharing with Ukrainian forces, according to current and former officials.

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As noted in the interview, albeit with parseltonge to obscure the reality of the situation and keep the American public thinking sending more money and weapons into Ukraine will change the outcome – it won’t, Russia has dug in throughout Donbas and now controls eastern Ukraine.  Donbas was always the goal of Vladimir Putin as a buffer against Western use of Ukraine.

Ukraine is to the United States what North Korea is to China; both are fully controlled proxy states.  Western media keep pretending that Ukraine is not the playground for the U.S. government.  However, the larger reality is clear and accepting that reality explains why the U.S. government is funding the Ukraine government.  Meanwhile Vladimir Putin is clear-eyed and has no problem watching the U.S. go bankrupt trying to keep Ukraine afloat.

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