EU solution to energy crisis: print more money and ensure economic crisis!

[pooya87]

Those who don't learn from history are doomed to repeat it.
This is not some ancient history we're talking about, it's all recent. They recently went on a money printing spree during the pandemic and the consequences of it are being felt today in form of economic crisis. Euro, Dollar, Pound, etc all got dumped because of it and yet to solve the energy crisis they decided to print even more money and inject it into the industry to artificially lower the price for a short time; the reduction is not even that significant and we already know the consequences of market manipulation like this!

In Germany, Europe’s biggest economy, the leadership is trying to spend its way out of the crisis as only it can. But even there it’s not clear the relief will be felt in time, and whether it will further wobble the country’s already deeply divided stance on how to help Ukraine and whether to work with Russia or isolate it.

They injected 200 billion euros in one of their attempts alone!
The public is already divided and angry enough, with protests breaking out all around Europe every day, yet they put a bandaid on an amputated leg!

Not surprising that New York Times is already comparing the current crisis in Europe with World Wars era!

That moment, it seems, is arriving as strikes and protests over the rising cost of living proliferate, ushering in a period of social and labor unrest not seen since at least the 1970s.

“We have seen this after the First World War, Second World War and also in the ’70s,” said Kurt Vandaele, a senior researcher at the European Trade Union Institute. “There were strike waves associated with a real spike in inflation.”

How much worse the ongoing protests in Europe are going to get in the future when inflation caused by today's crazy money printing hits their countries? The inflation is already at its highest in decades in the Union where poorer countries specially in Eastern Europe face the worse of it which leads to riots every day.

In the eastern states that are among the country’s poorest, and most conservative, tens of thousands of protesters take to the streets weekly

in France, the strikes and demonstrations are gaining in intensity as a fear of eroding living standards dominates concerns, polls say.

Tens of thousands gathered in the Czech capital for the second such protest in a month, spurred by an energy crisis and rising prices that are affecting countries across Europe.

https://www.nytimes.com/2022/10/21/world/europe/inflation-prices-britain-ukraine-russia.html

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[yudi09]

Emergency measures called for by parliament to tackle rising energy prices, including restrictions on imports of pipeline gas.
As parliament demanded in September that renewables should achieve a 45% share in the EU's energy mix by 2030, from the current target of 32%. As discussed by Morten Petersen in an interview. I think it can be a solution to the crisis they are experiencing.
source

I consider that this crisis cannot be separated from a country's excessive dependence on other countries for its needs. Regarding the EU crisis, it can be judged that the EU is too dependent on Russia for imports.

[davis196]

What's the point of this forum post? Crying and whining about the European central bank's monetary policies?
The natural gas prices in Europe actually went down recently, because the European gas storage facilities are filled up to 90%.
The European Union imports a tiny amount of Russian gas right now. The expectations of a global recession pushed the oil/gas prices down, so the OPEC countries decided to lower their oil production. The EU inflation rates will start lowering in 2023-2024, when the EU economy adapts to the new supply chains and the newly found "gas independence" from Russia.
I know that the European central bank reacts really slow to the inflation, but increasing the interest rates will create problems with certain countries to pay off their debts(Italy, Greece, etc.).

[348Judah]

In fact many don't realize that printing more money isn't the solution to the global economic crisis, it will rather worsen the conditions when other factors meant to be in olace were not, aslo the first constituents to the global energy crisis is the government as well becau the they have failed to set a control system as measures to tackle the effect from the energy utilized and it's effect on the environment as a whole, whenever there's an headache, the solution doesn't start be cutting off the head, it time they repositions their target to the economic development and growth and encourage active participation from every sectors involve to build a good environment and have a dree economic flow above inflation and other disastrous factors that hinders it from progressing.

[pooya87]

What's the point of this forum post? Crying and whining about the European central bank's monetary policies?

Remember the pandemic 2 years ago? Whenever they start printing fiat, the value of that fiat dumps. It won't happen right away but it is guaranteed. So you'll have to use that to your advantage by expecting inflation and looking for hedges against it.
Remember the pandemic? Bitcoin price was below $10k and it even went as low as $3k while they kept printing money and while people (like today) were moaning about "why bitcoin isn't mooning". Suffice it to say that bitcoin price went up 2200% as inflation showed itself more.

They are printing fiat again and bitcoin price is $19k today.

There will be hard times ahead but I believe after the economic crisis in the West is concluded, there is a good chance that we would be seeing the biggest bitcoin rally in history specifically due to all the value that fiat will have lost by then.

[crwth]

Isn't it suitable for the short term? It's not going to be good enough for a long time. Since the economy might be even in more danger if that happens, imagine having lots of money injected into the economy and people that have nothing to do with decreasing the supply. It will be like wanting more inflation affecting everyone in the world.

[stompix]

What's the point of this forum post? Crying and whining about the European central bank's monetary policies?
The natural gas prices in Europe actually went down recently, because the European gas storage facilities are filled up to 90%.

This is the reason why:
Eu gas and electricity prices drop 80% to 2021 level, another apocalypse averted

He got triggered by it, he hates the EU and the USA so much he is just desperate that none of them are crashing down, that nobody cares about his propaganda where germans burn wood, where they are out of sunflower oil where 150% of the companies are unemployed and al those lies.

He looks around, he sees inflation at 60%, and he sees people getting 7$ a month to buy food from the government, but it's all about Europe going to be doomed.
And when reality hits he gets so triggered sprouting nonsense like the above!
Forget gas, we don't need gas when we see the Russian and Iranian propagandists burning in their own envy flames.

[NeuroticFish]

Remember the pandemic? Bitcoin price was below $10k and it even went as low as $3k while they kept printing money and while people (like today) were moaning about "why bitcoin isn't mooning". Suffice it to say that bitcoin price went up 2200% as inflation showed itself more.

Politicians' solution for everything is printing money. Nothing new there.
We, bitcoiners can cry that our income is falling and the daily expenses rise and, on the other hand, we can be happy that we're bitcoiners and bitcoin price will fix this, sooner or later.

[pooya87]

Isn't it suitable for the short term? It's not going to be good enough for a long time. Since the economy might be even in more danger if that happens, imagine having lots of money injected into the economy and people that have nothing to do with decreasing the supply. It will be like wanting more inflation affecting everyone in the world.

Governments always choose the easiest solution for short term when facing a crisis instead of the harder long term solutions. This is why printing money has always been on top of the solution list at times like this. For example during the pandemic the choice was between a catastrophic recession and long term inflation so they printed money to avoid the former knowing they cause the later.

Right now they have the same choice to either find a replacement for Russian energy to increase the supply (and decrease its price) or to increase inflation in long term by artificially decreasing the price to solve the problem short term. I think they chose this route (ending in inflation) to try and get over winter and postpone finding an alternative energy source for next year, which in my opinion is a big gamble since there are a lot of unpredictable variables involved in that.

[Bitstar_coin]

In fact many don't realize that printing more money isn't the solution to the global economic crisis, it will rather worsen the conditions when other factors meant to be in olace were not, aslo the first constituents to the global energy crisis is the government as well becau the they have failed to set a control system as measures to tackle the effect from the energy utilized and it's effect on the environment as a whole, whenever there's an headache, the solution doesn't start be cutting off the head, it time they repositions their target to the economic development and growth and encourage active participation from every sectors involve to build a good environment and have a dree economic flow above inflation and other disastrous factors that hinders it from progressing.

Bro these aren't ordinary citizens printing money, they are governments with access to economists in the country to give input on what will happen when such action is taken, so trust me they are fully aware printing more money isn't the solution, but they will rather take the easier way out than finding a tactical solution.

[pooya87]

Japan is another country (that is basically defined in the Western Bloc) to inject a huge amount of money into the economy to artificially keep it afloat and only postpone all the problems that they are going to face for a short time. The amount is $490 billion stimulus which was approved recently [1].
It is worth mentioning that after United States, Japan has the largest national debt of whopping $15.3 trillion and a public debt to GDP ratio of 289% [2]!

[1] https://www.business-standard.com/article/international/japan-to-okay-490-billion-in-stimulus-to-cushion-impact-of-inflation-122102800189_1.html
[2] https://www.usdebtclock.org/world-debt-clock.html

[DrBeer]

There is one popular saying that describes the essence of such a presentation of information well. Literally from Ukrainian, it can be translated as "a fool is rich in his fantasies"

Although such a presentation of information is also characteristic of all Russian media, including politicians. Okay, let's leave the mental "features" aside, let's move on to the main thing.
Provide official information about:
1. The scale of "money printing" by the indicated countries
2. Purpose of these additional financial resources

But then, on the basis of not fantasy, but reality, we will discuss what is happening?

At the same time, yes, I completely agree that during the covid pandemic, many countries that care about their population were forced to turn on "money printing", consciously understanding the risks and consequences in order to support their population and business in such a critical situations. I understand it is difficult to understand for residents of countries where the population is just biomass, and the state does not care about them at all

[pooya87]

The news coming out of Europe has been pretty weird lately.

On one hand the mainstream media celebrated the fact that gas in EU is now worth a lot higher compared to last year by focusing on price not being at ATH (kinda like those who talk about bitcoin price drop after the bubble pops)!

On another hand they claim to have their storages full while the energy dependent industries keep shutting down around EU and the energy sector leaders talk about a severe shortage. Not to mention the power outages that are starting to happen in some European countries.

The UK has just 9 days of gas supply left, the owner of British Gas warned today - as it reopened a giant storage site ahead of winter.
Centrica said the UK has some of the lowest levels of gas storage in Europe, compared to Germany which has 89 days' worth, France at 103 and the Netherlands at 123.

That's just the best case scenarios out of the 44 European countries rest of which are facing a much worse energy crisis.

[NeuroticFish]

On one hand the mainstream media celebrated the fact that gas in EU is now worth a lot higher compared to last year by focusing on price not being at ATH (kinda like those who talk about bitcoin price drop after the bubble pops)!

I think that this is an odd way to see the situation, or maybe we've read different news.

Imho the reasons for celebration may be related to the fact the price of gas has been falling, and that by a great deal. It's a trend that means that there's (more than enough) gas on the market, hence also decreasing the pressure on the electricity price (by also creating more electricity from that gas).

[LoyceV]

Politicians do whatever's good for their short-term popularity. Why face a crisis now, if you can throw money at it and push it to the next political term? Even if the inevitable crisis becomes much bigger because of this, it's not their problem anymore when it happens.

The way politicans and central banks are going reaffirms my choice for Bitcoin. They can't print it, so they fear it.

[pooya87]

It's a trend that means that there's (more than enough) gas on the market,

Not on the market but in the queue. And that's the biggest problem.

The demand only went down slightly (and will go down more if more industries shut down).

The supply has gone down because the imports from Russia were significantly reduced while the replacement is almost all in form of LNG which has to be received in LNG terminals and converted before pumped into the pipeline in a very hard and time consuming process. This has made a queue of tankers on the sea waiting to dump their cargo and move to next shipment. That forces the price to go down.

This is exactly like COVID time. The demand had slightly come down while supply was still flowing. So when the terminals reached their capacity they couldn't store the oil anymore and that caused the oil price to become negative for the first time in history (AFAIK). The price of petrol and other oil products were still up though.

hence also decreasing the pressure on the electricity price (by also creating more electricity from that gas).

That's a little contradictory with some news regarding blackouts in different countries (although the scale is still small) and the warning they issued about possibility of a much larger blackout before Truss left the British office.

[NeuroticFish]

It's a trend that means that there's (more than enough) gas on the market,

Not on the market but in the queue. And that's the biggest problem.

The demand only went down slightly (and will go down more if more industries shut down).

The supply has gone down because the imports from Russia were significantly reduced while the replacement is almost all in form of LNG which has to be received in LNG terminals and converted before pumped into the pipeline in a very hard and time consuming process. This has made a queue of tankers on the sea waiting to dump their cargo and move to next shipment. That forces the price to go down.

This is exactly like COVID time. The demand had slightly come down while supply was still flowing. So when the terminals reached their capacity they couldn't store the oil anymore and that caused the oil price to become negative for the first time in history (AFAIK). The price of petrol and other oil products were still up though.

I don't know, if I look at the charts, both futures and spot (maybe also here) gas prices are going down since August.
This looks to me more a normalization of the markets (both supply and demand) than caused (only) by the queues of LNG tankers. But I don't know for sure.

That's a little contradictory with some news regarding blackouts in different countries (although the scale is still small) and the warning they issued about possibility of a much larger blackout before Truss left the British office.

I don't know of blackouts in EU. I remember power outages in Middle East (but I may be wrong) this summer(ish), but not in EU.

Here I guess that nobody has expected this go this well this fast (I am also surprised). Of course, it may be just a false sentiment of the market; of course, Russia can reduce further the supply and the markets will become turbulent again.
But UK is not in EU and this may matter much more than they are willing to admit. Plus, clearly, there were/are fears the electricity will become prohibitively expensive and even so it may be missing, just because some politicians thought that relying mostly on Russian gas is okay. And the politics in UK are going from bad to worse since they've left EU. Even in the days EU had no issues, UK had gas/petrol shortages (allegedly because of the truckers).

In EU now coal is also being used for electricity again. Certain atomic power plants will do their job for longer. And the gas got cheaper too. There are now reasonably good chances we'll be OK even without Russian gas. Of course, at the expense of shutting down the most power hungry industries (steel, aluminum and many others).
But UK... I don't know...

[fillippone]

Politicians and their weird ideas.

Christine Lagarde is the President of the ECB, and should be an über nerd on economical knowledge.
Yet these are her latest claim:



The summit of it all:

Inflation has just pretty much came out of nowhere

I have an idea about this:



The above graph shows the annual growth rate in prices i(European Inflation ex food and energy, white line) and the yearly growth rate in the monetary aggregate M2  (money inflation, orange line).

No wonder before the modern economic theory, inflation rate was the growth in money (Hayeck) , rather in prices (Keynes). Where this inflation comes? Really?
Correlation is not causation, yet it’s a very powerful  hint.

PS. Ukrainian invasion happened in February 2022.

[Mauser]

European crisis management this year is as bad as its get in tackling the energy and economic crisis. A quick look at the Euro compared to the Dollar shows how far behind the Europeans are. The ECB waited to long to start raising interest rates and even now with 10% inflation they are very cautious. The problem is the big difference in European countries and the ECB is more afraid to ruin borrowing costs for southern European countries than to contain inflation. Printing more money is the easy fix that will only move problems into the future, instead of fixing them today. If I had any money to invest right now I would stay away from European markets and look abroad. Another big problem is that the European Union is so divided and doesn't work together properly.

[pooya87]

Another case of economic and energy crisis and a situation that doesn't seem to be getting any better. This is in Germany again with 4000+ protests in only 2 months. We are still in Autumn and Winter hasn't come yet.
Unless they can find an actual solution instead of denying the crisis even exists we are going to see more crisis like this and mainly the effects of the money printing today will show in form of more inflation next year.

More than 4,400 demonstrations relating to corona policy, the Ukraine war or the climate and energy crisis have taken place in Germany since the beginning of September. This emerges from figures from the assembly authorities, which WELT AM SONNTAG evaluated exclusively.

So far there is no nationwide picture of the situation on the protests, although politicians and constitutional protection officers had already warned in the summer of "threatening security situations" or even "popular uprisings" in view of the energy shortage and rising prices. The evaluation now shows for the first time: Since mid-September, more than 100,000 people have taken to the streets every week.