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EU Commission, U.S. Submit To Reality
Me stating the very obvious on Feb 28:
All energy consumption in the U.S. and EU will now come at a premium price. This will push the EU and the U.S. into a recession. As Russia will increase the prices for exports of goods in which it has market power – gas, oil, wheat, potassium, titanium, aluminum, palladium, neon etc – the rise in inflation all around the world will become significant.
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On February 4 Russia and China declared a multipolar world in which they are two partnering poles that will counter the American one. Russia's move into the Ukraine is a demonstration of that.
It also shows that the U.S. is unwilling to give up its supremacist urges without a large fight. But while the U.S. over the last 20 years has spent its money to mess up the Middle East, Russia and China have used the time to prepare for the larger conflict. They have spent more brain time on the issue than the U.S. has.
The Europeans should have acknowledged that instead of helping the U.S. to keep up its self-image of a unipolar power.
It will take some time for the new economic realities to settle in. They will likely change the current view of Europe's real strategic interests.
I admit that it has been amusing me to watch the process predicted above through the ever evolving headlines:
Europe Rejects Putin’s Demand for Natural Gas Payments in Rubles – Mar 24, 2022, Bloomberg
(Bloomberg) — European Union leaders rejected Vladimir Putin’s demand to pay for natural gas in rubles …
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EU payment in roubles for Russian gas would violate sanctions regime – document – Apr 14, 2022, Reuters
BRUSSELS, April 14 (Reuters) – Payment for Russian gas in roubles by European Union buyers would break the EU's sanctions regime against Moscow, an internal European Commission note said.
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EU Sees Way to Pay for Russian Gas Without Breaching Sanctions – Apr 22, 2022, Reuters
BRUSSELS (Reuters) – EU companies may be able to work around Russia's demand to receive gas payments in roubles without breaching sanctions if they pay in euros or dollars which are then converted into the Russian currency, the European Commission said on Friday.
Even the U.S. had to submit to reality:
Yellen warns European ban on Russian energy could harm economies – Apr 21, 2022, rfi / AFP
Washington (AFP) – A European ban on Russian oil and gas imports could have unintended economic consequences, US Treasury Secretary Janet Yellen said Thursday.
Major European countries including Germany have faced calls to stop buying energy from Russia and starve its economy of revenue in retaliation for its invasion of Ukraine, which has sent more than five million people fleeing.
Speaking to reporters following a meeting with Ukrainian Prime Minister Denys Shmyhal and Finance Minister Sergiy Marchenko in Washington, Yellen said such a ban could ultimately cause more harm than good.
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A European energy ban would raise global oil prices "and, counterintuitively, it could actually have very little negative impact on Russia, because although Russia might export less, its price it gets for its exports would go up."
Referring to a proposed ban, Yellen said, "if we could figure out a way to do that without harming the entire globe through higher energy prices, that would be ideal."
Folks like Yellen, and the disgraceful President of the EU Commission Ursula von der Lying, are paid way more than I will ever receive for my work through reader donations here (a big thanks for those btw!). Still they and their very ignorant but highly paid consultants took weeks to understand the most basic realities of life.
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Note: You are not entitled to receive freebies just because you claim to be 'woke', are deeply Russophobic, or can distinguish the taste of twenty different wines served at various receptions in Brussels.
Get used to it.
By Tsvetana Paraskova – Apr 21, 2022, 7:00 PM CDT, Oil Price
As the global energy transition continues to accelerate, the demand for key battery metals is soaring and demand is struggling to keep up.
The inconvenient truth of the energy transition is that the industry at the top of the clean energy supply chain is a very carbon-intensive one.
President Biden, recognizing this reality, has added strategic and critical metals to the Defence Production Act of 1950.
The metals mining industry is at a crossroads. Key energy transition metals need trillions of U.S. dollars in investment if the world has any chance of advancing the transition to meet the Paris Agreement targets. At the same time, investors are backing out of carbon-intensive sectors, which metals mining undoubtedly is. Moreover, governments in developed nations with net-zero goals—including the U.S. Administration—want only “sustainable” new domestic mining to extract the minerals critical to support increased transportation electrification and renewable power generation aligned with their net-zero by 2050 targets. Currently, demand for key battery metals, including lithium, graphite, cobalt, nickel, copper, manganese, and aluminum, is soaring, but supply is struggling to catch up.
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Steel prices are also double in USA compared to pre-COVID 2019. Any type of energy transition is more expensive and slower than it would be few years ago — if attempted.
It is not fully appreciated how and why EU economies got dependent on natural gas. For some uses, natural gas is hard to replace, but as energy is concerned, there is a little difference between burning fuel oil and natural gas. However, for years the latter was at least twice cheaper. Oil has to be refined to make fuel oil, while NG has to be “cleaned”, it is done close to the well head and cheaper to do. Similarly, the cost of making electricity from NG is smaller than from oil. Thus EU has a problem now when jul by jul, crude oil became cheaper than NG, I think by 1/3.
Give or take a trillion dollars, EU could switch to crude oil, but by the time it would be done, prices could revert to those before NG crisis that started in 2020. Not to mention that all the necessary refining capacity, new boilers etc. add up to a lot of steel. Unpredictable economic environment necessitates either spare capacities, you use this or that, or you stockpile, say, nitrogen fertilizers and aluminum when energy is low, and withdraw from stockpiles when energy is high. Or you just switch off and on the industries and use quantitative easing in rough periods.
The last one seems to be a preferred solution, but at some point, Euro and USD will turn into Monopoly money, as opposed to solid currencies like Indian and Pakistani rupees, Russian ruble, Argentinian peso etc.
Posted by: Piotr Berman | Apr 24 2022 0:18 utc | 128
Yes, but you know that Europe’s submission to reality at present is temporary and contingent only on its present necessity, and that the U.S., ruler of the Empire, will do everything in its power to wean Europe off Russian gas by all means available today and yet to be devised and invented, that will greatly benefit the U.S. economy to Russia’s future detriment. Treachery has shadowed Russia’s pursuit of Europe for centuries.
I have more than once accused Western media and U.S. intelligence of trying to crack the code to Putin’s thinking and failing miserably. Yet here I am attempting to break that code myself hopefully with better luck, or not.
Putin has always suffered from a weakness for the West and blind spot when it came to Europe, hence the outcome at hand. He was and maybe still is, albeit to a lesser extent, of the Petrine (Peter the Great) civilizational mindset vying for the approval of European intelligent society and in return being repeatedly condescended to and spurned. In that same vein, Europe is like an ex-lover Putin can’t shake that keeps trying to exploit his Achilles heel and generosity. In fact, Europe is Delilah, plotting behind the scenes with the ruler of the Empire to destroy Putin and weaken Russia.
Putin’s refreshing Munich speech constituted an unfeasible challenge aimed at a cynical audience. While it thrust him onto the international political spotlight as a bold, visionary leader trying to shatter a duplicitous geopolitical standard, but willing to explore an unprecedented diplomatic relationship between the West and Russia, it logically morphed into a watershed moment, where once the best Russia had to offer was dismissed for the last time, contemporary Russian resistance finally made its official debut. It was not a fêted, but a fated event for Putin and Russia.
Russia should not have to deign to any culture or geopolitical defensive structure. Russia is graced with her own rich and unique culture, conceived on a historical tapestry of compelling events unfolding throughout centuries over an expansive terrain where East meets West and cultures mingled and today are one. This geographical reality represents a potentially significant, yet still undervalued prospect for geopolitical and economic advantage. Perhaps, present events are destined for that realization.
Russia is protected by an advanced, formidable military arsenal with nuclear deterrence. She doesn’t need to surrender her sovereignty for protection from any external defensive contrivance, just to end up a vassal of the Empire like Ukraine. Today, Russia has a powerful ally in China, to everyone’s chagrin, and can boast other allies whose reputation for resistance against the Empire’s hegemonic ambitions precedes them. In addition, Putin’s audacity in launching the SMO has curiously gained the tacit respect of other countries like India, Pakistan, KSA and others.
Is Russia a country still torn between its affinity to Western culture and the natural pull of the East? Yes. Moderation is the key that Russia failed to practice, and just as China exercises discipline in regulating Western influence, Russia is learning the hard way the wisdom of such restraint.
Russia needs to get over the close to 800 year-old Golden Horde trauma and view China as a power-sharing global partner and collaborator that respects Russia’s sovereignty and uniqueness. Let go of the past, Russia, I mean Putin. China is not on an imperial Genghis Khan mission. It’s goals are economic, not expansionary, territorially or ideologically. This relationship will prove to be mutually beneficial. I already wrote recently that when the Sun starts to set for Russia in the West, it will rise tomorrow in the East. Russia’s Eastward economic focus will favor its recovery from the punishing flight of Western investment, filling the vacuum in regards to employment and technology, creating a healthier more balanced future from West to East where Russia will no longer be as dependent on Europe and the U.S. dollar, and therefore will be protected from the financial tyranny and cancel culture the West resorts to in exercising control.
Just as Europe will turn to U.S. ingenuity to service its needs, so too Russia must wean itself away from its dependency on Europe and the Petro-dollar, and as Putin stated, Russia will diversify its exports to fast-growing markets South and East, but he’s been suggesting this for way too long. Actions speak louder than words.
Dostoïevski wrote in 1881:
When we turn to Asia, with our new view of her, something of the same sort may happen to us as happened to Europe when America was discovered.
With the passage of missed opportunities, I believe that Russia will benefit from a more symbolic discovery and rebirth, rather than from the grandiose denouement the great Russian author implies. I suspect that Putin is still holding back, but starting to move in the right direction.
Western media like to presume that Putin is channeling Stalin, or that he wants to revive the Romanov Dynasty and crown himself, Czar of Russia. They even repeatedly flash Putin’s super-imposed profile next to a picture of Nicholas II.
I’ll admit, my goal is not really to break the code to Putin’s thinking. I want to answer the question: In which unfinished context of Russia’s history does Putin belong? I came to this preliminary conclusion:
The earlier Putin may have leaned more towards the idealism of Peter the Great, and Nicolas II, but this later Putin has evolved to embracing and emulating the positive aspects of Stalin’s Soviet Union. Now with his bold move on Ukraine, he also seems to be projecting the noble intentions that drove Nicholas I into the Crimean War, but hopefully having strengthened and eliminated the weaknesses that led to Russia’s defeat in that war. Suffice it to say that from day one I stated: I believe, he will succeed.
So add to that mix of Stalinist-type innovation and industrial progress and Nicholas I’s case against Western duplicity; a Slavophile, and Eurasionist perspective and what do you get?
Why do I refer to an unfinished context? IMHO, and I’m presuming, Putin’s place in history is to finish what was started and then frustrated or aborted by events, missed opportunity and failure.
I believe what Dostoïevski wrote is true. My view is that Russia’s destiny lies in the direction of the rising Sun and not where it sets.
At this point I should mention, that I borrowed the historical references and literary quotes I’m adding here from an article written by author and historian, Orlando Figes, but rather than quote him here, I wanted to express my opinion my way, since I previously held a similar perception, with the caveat that he doesn’t believe in what Putin is doing, and I do, and therein lies a world of difference even in my expression, although his is more erudite. I can’t pretend to be a historian.
Figes brings up excerpts from Alexander Blok’s The Scythians, and I won’t get into the weeds of his reasoning, as I want to wind this down to make my point. Here are some of those verses:
You, the old world, now rushing to perdition,
Yet strolling languidly to lethal brinks,
Yours is the ancient Oedipean mission
To seek to solve the riddles of a sphinx.
The sphinx is Russia, sad and yet elated,
Stained with dark blood, with grief prostrate,
For you with longing she has looked and waited,
Replete with ardent love and ardent hate.
I wonder if Churchill was inspired by Blok’s verses when he conjured his definition for Russia?:
Russia a riddle wrapped in a mystery inside an enigma.
The Scythians’ prophesy is manifesting now unless Europeans turn away from NATO:
Yet how will ever you perceive
That, as we love, as lovingly we yearn,
Our love is neither comfort nor relief
But like a fire will destroy and burn.
Finally, I’ll conclude with this warning: The Sun is really setting on you… condenada (doomed) Europa, and know that the Empire you are a part of, is not one upon which the Sun never sets, but whose demise is as certain.
Posted by: Circe | Apr 24 2022 8:34 utc | 142
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