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THIS WEEK’S EDITORIAL
GEOPOLITICAL TURNING POINT: The bombing of the Nordstream gas pipelines is the biggest Geopolitical blunder in modern history. It has split the world into two largely intractable political and economic zones. It has determined the economic fate of Western Europe as an energy desert, desperately seeking oil and gas from far flung providers at high prices.
Last week, another massive blunder was revealed by Francois Hollande, the former President of France, when he confirmed that Western Europe had deliberately signed the Minsk Agreement in 2015 with no intention of holding true to what had been agreed. There is no easy way back from these decisive events.
ENERGY PRICES ARE FALLING: Energy prices in the US are still falling. This suggests that demand is falling which, in turn, suggests that the US economy is now weakening as expected by BOOM.
The Continuous Contract Price for Gasoline at the CME (Chicago Mutual Exchange) has fallen from $4.25 in June to around $2.25. Since mid-August, the Continuous Contract Price for Natural Gas has fallen from $10 to $4.50. And the Continuous Contract Price for West Texas Intermediate Crude Oil has fallen from $125 per barrel to around $80.
In a world of supposed energy uncertainty, those price falls are noteworthy. Despite the war in Ukraine, the price of Brent Crude on the CME has also fallen by similar amounts over the last 6 months. Brent is the leading global price benchmark for Atlantic basin crude oils. It is used to set the price of two-thirds of the world’s internationally traded crude oil supplies. It is one of the two main benchmark prices for purchases of oil worldwide, the other being West Texas Intermediate.
IMPACT ON RUSSIA: On December 5th, the European Union, the G7 nations and Australia introduced a $60-per-barrel price cap on Russian seaborne oil exports. This is another disastrous decision. They also banned Western companies from providing insurance and other services for Russian oil shipments unless the cargo is purchased at or below the set price.
Russia has effectively said that it will not trade with nations that support the price cap.
The Russian President, Vladimir Putin, last week signed a presidential decree on oil exports. He banned the supply of oil and petroleum products from Russia to any nations which apply a price cap in their contracts or refer to a price cap. The order is effective from 1st February.
The Russian ex-President, Dmitry Medvedev, had a few words to say about the current situation. He said this “is the last warning to all nations: there can be no business with the Anglo-Saxon world [because] it is a thief, a swindler, a card-sharp that could do anything.”
He also said “For Russia, there will be no restoration of normal relations with the West for years or even decades to come” “From now on we will do without them until a new generation of sensible politicians comes to power there. We will be careful and alert. We will develop relations with the rest of the world”. These are strong words indeed coming from a former Russian President. He is currently the Deputy Chairman of the National Security Council of Russia.
Also last week, Russia’s Foreign Minister, Sergey Lavrov, was making Russia’s position very clear in regard to the European Union. He said that Russia will “no longer do business as usual” with the EU. He also said that Moscow has no intention of “banging its head against a wall” as it can find countries to work with beyond Europe.
Russia has now decided not to cooperate with Western Europe in the future. These statements from such senior spokesmen were brutally clear. This leaves the EU with an extremely difficult future, one without access to cheap, abundant energy. The European economy will never be the same again. It will become almost entirely dependent upon oil and gas from the United States and it will have to pay whatever price the US sets.
The Middle East will not come to its rescue. In particular, Germany cannot possibly continue to be a manufacturing giant without cheap energy. All of this favours the United States, Russia and China. The people of Western Europe will be left to suffer as their economies struggle to maintain their current standard of living.
RUSSIAN ECONOMY CONTRACTS: The Russian economy contracted by 3.7% Year on Year in the third quarter, as at end of September. Many commentators think that this will be a major problem for the Russian State. However, BOOM does not agree. Russia’s unemployment rate is 3.7%. It has abundant supplies of energy, water and food and, as a result, is relatively self-sufficient plus it has a strong relationship with the manufacturing powerhouse of China.
It is not isolated. It has many friends in the Shanghai Cooperation Agreement group of nations and in the BRICS group of nations. BRICS includes Brazil, Russia, India, China and South Africa. But other nations are keen to join. Saudi Arabia, the United Arab Emirates, Egypt, Iran, Syria and Turkey have all expressed interest in joining the BRICS group.
The Shanghai Cooperation Organization has 8 member nations, 4 observer nations and 9 “dialogue partners”. And Russia has developed close links to many other nations in Asia, the Middle East and in Africa. It has long standing ties to India. The total aggregate population of all those friendly nations amounts to 6-7 Billion people which exceed 70 – 80% of the Earth’s population
By comparison, Western Europe and North America have a total population of less than 1 Billion, only 700 – 800 Million. By abandoning Western Europe and the US, Russia is now able to concentrate all of its diplomatic and trading energies elsewhere. It is able to export its vast quantities of food, energy and energy expertise to friendly nations, but especially in regard to oil, gas and nuclear power. Many undeveloped nations need these to develop their economies.
The effect of this is that the price of energy will remain stable in those nations as the future unfolds. However, the price of energy in the US, UK and Western Europe may rise. America cannot frack for oil and gas forever without significant cost increases. And it is itself very dependent upon oil and gas imports from Canada and Mexico.
One piece of good news emerged on Friday. Russia and Turkey have agreed to build a “gas hub” in Turkey. This hub could supply gas to Eastern Europe and, possibly Western Europe. The US is unhappy about this development. A spokesperson for the US State Department said “we urge our allies to take steps to diversify their energy sources, to reduce energy reliance on Russia.” But Turkey, a member state of NATO, is not listening.
ANOTHER FOOLISH EUROPEAN LEADER: On Friday, the former President of France, Francois Hollande, stated that Angela Merkel was correct in her recent comments on the Minsk Agreements concerning Ukraine. Merkel said that the agreements were disingenuously signed in 2015 as a ploy to allow Ukraine time to build up its military forces with no real intention of a long lasting peace.
Hollande also stated “the conflict will end when Russia fails, and then the Minsk agreements can be resurrected to establish a legal framework already accepted by all parties.”
BOOM has to ask the question. What madness is this? Hollande is presuming that Russia will be defeated. He is also presuming that Russia will forget the subterfuge surrounding the 2015 Minsk Agreements and readily agree to sign them again. Perhaps he should consider other outcomes that may occur? Does he have a crystal ball or is he terminally incompetent?
Russia will now speed the war on Ukraine after these comments by Merkel and Hollande. They are very unhappy with the dishonesty displayed so boldly and the destruction of Nordstream. The recent actions of the American Congress to continue to fuel the war with more weapons and more money from the US taxpayer won’t help. Patriot missile systems will make everything worse, not better. The expected reaction from Russia is plainly obvious.
Just 2 days ago, it was reported that Russia had launched its biggest missile attack so far on key infrastructure targets around Kiev and also in Western Ukraine. Targets as far away as Lviv were hit, close to the border with Poland. The electrical grid is now severely impaired but, according to reports, Russia has left sufficient electricity supplies to allow the nuclear power plants to avoid meltdowns. These actions are strong messages that Russia is increasingly determined to settle the war militarily. Peace agreements will have to be signed eventually. But the question is when? The economies of Ukraine and of Western Europe will be badly damaged in the interim.
EXCESS DEATHS FROM ALL CAUSES IN EUROPE – YOUNG EXCESS DEATHS OUTWEIGH THE ELDERLY: Time to review the number of Excess Deaths from All Causes in Europe. But first, it is important to understand how an “excess death” is defined. An excess death is one that occurs over and above the expected average death numbers from a previous period.
The source of this information is the Excess Mortality data from Euromomo.eu. Its website is excellent with detailed graphs showing the numbers of excess deaths. The EuroMOMO monitoring system is based on national mortality data registered in 29 countries or subnational regions participating in the EuroMOMO network.
The covered population mortality in the network is approximately 420 million people. At EuroMOMO, excess deaths are drawn on graphs as cumulative lines over and above the Zero line of the expected average progressing through each 12 month period.
The graphs show that Europe in toto is on track to around 180,000 excess deaths in 2022. However, the chilling lesson is to be found in the breakdown of these deaths into separate age groups. Those graphs show that children aged 0 – 14 years are dying in greater numbers than in previous years. The age group 15 – 44 years is even more striking with the line clearly above previous years.
However, excess deaths in 2022, in the age group 45 – 64 years, is lower than in 2020 and 2021. And in the age group, 65 – 74 years, the excess line is way below the lines for 2020 and 2021.
In the age group 75 – 84 years, the 2022 line rises again to be above the 2020 and 2021 lines. And from 85 years on, the 2022 line is mid-way between the 2020 line and the 2021 line.
These are extraordinary graphs. They overwhelming show increased excess deaths during 2022 occurring in the younger age groups, below 45 years age. But the vast numbers of excess deaths are still occurring above 65 years age.
The question must be asked – why are younger people dying more than previously? It cannot be due to Covid as it is well known that deaths in younger age groups from the Covid disease itself are rare. Covid mortality is overwhelmingly above the age of 80 years in all nations.
So BOOM must ask – WHAT is killing these young people in greater numbers than in previous years? The fact is that we do not know because autopsies are not being conducted in sufficient numbers and, if they are done, inadequate technology is being used to determine the cause. However, many commentators are pointing the finger at the Covid vaccines as the possible cause because there is no obvious other cause.
If this is the case, then almost 100,000 people in Europe below 84 years of age have died from the Covid vaccines this year alone. An annual excess death toll of 100,000 is equivalent to about 365 Jumbo jets crashing in Europe. That’s one jet EVERY day. But no politician seems to care. And neither does the mainstream media.
To put this into perspective, the excess deaths above 85 years amount to only 70,000. So why is the younger excess deaths outnumbering the elderly excess deaths? This is very disturbing.
In economics, things work until they don’t. Until next week. Make your own conclusions, do your own research. BOOM does not offer investment advice.
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I’m in Moscow right now (my first Russia visit) and it’s looking pretty awesome around here.
It has a feel like the mid-80s in the US or Germany to it.
Most surprising fact to me so far: not a single person has appeared arrogant in central Moscow, contrary to all my experiences in other major cities around the world.
Thanks ‘m’ – this is good to hear – please carry on giving us the real status. Enjoy your trip and if you keep a diary, I would be happy to publish the detail so my readers can get an ‘on the ground no holds barred’ feel for Russia.
Hollande was a complete dolt as a leader. Spent most of his time chasing after his girlfriend(s).
ZOG Inc can fool most Americans most of the time. The Useful Idiots were stupid to take the CV-19 mRNA Genocide Shots & follow all the stupid CDC Protocols ; and they have been very slow to realize the Truth that this and more is a TPTB planned Holocaust. The Useful Idiots buy into the Vote Fraud and Communist Coup, the stupid Ukraine War and Sanctions, Global Warming from CO2, Chem-Spraying, GMO induced infertility, unConstitutional Affirmative Action Diversity & LGBTP, Sabotage of Food & Fuel and Public Education, Censorship of Conservatives, Cultural Marxism, and destructive levels of Welfare & Social Liberalism , etc ; and they will probably buy into the CBDC Economic & Social Tyranny, and doing nothing (no charges & no Nuremberg like trials) about all the Evil & Illegal things the Vampire Squid Beast is doing to enslave & Liquidate them. Please pray that God destroy the NeoCons like He did the USSR Oligarchs in 1989, and establish a Just and Honest Traditional Constitutional America.
As usual rhs jr – you have covered most, if not all, the afflictions, thank you. Now prayers are being sent daily. I am about to go down to the river, feed the birds and abundant small mammals and send prayers for a better world. 🙂
It’s 0830 now and the sun might just be seen on the horizon (where it stays until 1600) then back to the dark again. But the birds were singing at 0630, long before sunrise – they know it’s going to be a mild, sunny day for once. (10 deg C, WSW 10mph, 1013Mb).
Have a good day when you wake up!