Another terrific column:
As Europe Implodes, It Plans “Radical Intervention” Including Price-Setting, Suspending Derivatives Markets And Europe-Wide Margin Call Bailouts
[excerpt]
So what can Europe do? Nothing really, but it will pretend to be in control until the bitter end. The options the Czech presidency is set to suggest - according to Bloomberg - would complement measures floated by the European Commission in a policy note seen by Bloomberg last week. They included a power-demand reduction and price caps on renewables, nuclear and coal, all of which are of course dead-ends. The presidency is poised to propose similar “solutions” in the power sector and float the following additional tools:
To limit the impact of gas prices on power prices:
> temporarily capping the price of gas used for electricity generation
> putting a price ceiling on gas imported from Russia
> temporary exclusion of power production from gas from merit order and price setting on the electricity market could also be an option
Uhm, someone should tell Europe that since Russia is already barely exporting any “weaponized” gas to Europe to destroy the continental economy, setting a price cap on whatever molecules of gas are left won’t really do anything at all. But this is what happens when Europe is run by absolute idiots.
All that will happen is substitution.
Europe imposes price cap on Russian oil and gas.
Russia refuses to sell at that price.
Russia sells to Saudi Arabia, India, China, etc etc at or at a small discount.
Those countries then use that energy for their domestic consumption and sell off the oil and gas they would have used to the Europeans at world market price - pocketing a tidy risk free profit.
Europe virtue signals, pays more for its energy and still suffers a damaging energy shortage.