Posted on 10/06/2022 2:10:38 AM PDT by Cathi
German deindustrialization, transitioning to service based economy
The Duran: Episode 1399
What kinds of service?
I’ll make four observations:
1. Nord Stream 1/2 are fixable, and the Russians might hint this. However, if you ask me...they really only want to fix Nord Stream 2 (bigger output capability), and the Germans will only agree to operate Nord Stream 1. So, don’t expect the older pipe to be repaired.
2. Everybody, from small bakeries and bars....to major industry in Germany is currently freaked-out. The natural gas bills put upon them are outrageous. Some bakers are indicating they can survive for about two months before insolvency has to be discussed. Not enough carbonation? Well....the breweries and soda industry admit that their cost is reaching a level where production is impossible.
3. Indoor pools, fitness studios, and theaters are gauging the amount of time they have left before the cost for heating is too much.
4. The 200 Billion Euro ‘fund’ to save everyone from electrical and natural gas bills? Well...you end up paying for it via income or sales taxes. It’s not free, and you can forecast 2023/2024 as being massive inflationary years for the nation.
You can go back and blame ‘ostpolitic’ over the past fifty years and the various parties (left and right) that got deep into Russian natural gas sales. They all contributed to this moment, and there is no way out...other than massive fracking (nearly impossible to get them to realize this).
Business experience tells us tangible products have significantly better competitive/economic moats compared to those of services.
Services are based on people, who can walk out the door and start their own competing businesses. Products and product branding are more difficult to reproduce.
Take a look at BMW or Mercedes Benz. Or for that matter, take a look at Witch Hazel or Arm & Hammer Baking Soda in the U.S.
It will be interesting to see how home heating oil prices in the US impact the northeast; it is a Dem bastion but this will be felt by many people here. On top of the general inflation, I don’t see how this doesn’t hurt them badly.
Generally they take comfort in relying on voter who pay for nothing on their own, but spend taxpayer dollars instead; the problem with this inflation is that retirees and welfare queens are getting hit like everyone else (the dollars, regardless of the source, are buying less).
There’s no such thing as a service economy. The service comes from servicing manufacturing.
This has been going on for a long time, Germany has always had uncompetitive energy rates. This has helped create a dispersion of manufacturing, which really is nothing new.
This is a crisis, for now, but the policies that led to this have been baked in for decades. The worst of it was the “green” replacement of coal and nuke. And it was to be replaced by whimsical “renewables”, and Russian gas.
A more idiotic policy cannot be imagined. The Germans are prone to romantic, fantastical thinking. Its a bit odd to think that a people given to such precise engineering standards and craftsmanship have such a bizarre weakness, but there we are.
Fracking won’t get them out of this. Takes too long to explore, do the engineering, drill, etc.
LNG will certainly tide them over. There is a massive wave of LNG incoming.
Add - coal, electric imports (everyone in Europe who can, is scrambling to increase generation to fill German demand).
You don’t have to be a genius to see that hat following the direction of a mildly retarded teenage girl from Sweden is a bad idea.
I’m no expert, but I see it like this:
Resource extraction.
Manufacturing.
These things create wealth. They build a bigger economic pie which potentially benefits everyone. (”A rising tide lifts all boats.”)
“Rent seeking” is when someone does not make the economic pie bigger, but merely seeks a larger slice for themselves. The service economy fits into this category. Pizza delivery is a nice thing, but there is no real wealth creation in the act of delivering a pizza.
Socialism, in my opinion, is all about “rent seeking”. It’s wealth redistribution. If you have have any money, it just means you stole it from me. Which means I am entitled to steal it back from you. The pie isn’t getting any bigger, but different people get different slices. People who do not create wealth still expect to have wealth.
Any movement to a Service Economy is a movement toward socialism and stagnation.
Of course there is not....
That’s just a recent thing.
This has been going bad in Germany since @2009-2010.
LNG has become a comical joke. They admit that one ship load of LNG (first expected in mid-to-end of Dec)...will cover about 75-percent of what would flow through Nord Stream I in a single day. Even if the other suppliers take up some slack, you’d have to have a LNG ship docking every single day.
No gas or super expensive gas will hit every wallet.
Here is my thought. As soon as Biden says we are opening up Keystone and the US will resume oil and gas production immediately, all of this ends, including the war in Ukraine.
I had thought that Trump showed the way, not long ago.
There IS massive fracking, but it is in the US. Energy is fungible and it is a global market. OPEC will go back to their goats and Russia will sell Germany all if the LNG it needs at rock-bottom prices through a pipe that’s already built.
What no one seems to want to see is that Russia won’t make much doing this, and won’t have the money for military ventures.
Heck, peace could break out and the NATO leadership in Brussels could go back to chasing little boys.
Perhaps the thinking is: “No industry in Germany, no potential war machine again”.
If so, then the US-led de-industrialization of Germany starts to make sense. Just a bummer for the Germans, as they haven’t developed much of anything outside of industry (simply because they didn’t have to).
“Even if the other suppliers take up some slack, you’d have to have a LNG ship docking every single day.”
Yep, Sholtz makes a trip to the Middle East 2 weeks ago, visits multiple countries, comes home with a single tanker for this winter and vague promises of more to come in the future, but no agreements, as no one wants to deal with him, since Europe’s plan is to eliminate natural gas in the near future anyway.
Yes, there are a lot of people who think our policies are both anti Russian and anti German. Let’s just say we are VERY competitive and as Blinken would say welcome “great opportunities” when misfortune befalls our friends or enemies..:-) We have “interests” doncha know...:-)
Interesting posts on my favorite Ukrainian Telegram Channel this morning (after The New York Times disclosed that our intelligence agencies say that Ukraine killed Dugina.)
Resident
We wrote that the Office of the President immediately tried to divert suspicion from itself, and the Main Intelligence Directorate was given the task of draining the agents. The West made it clear to Bankova that he did not support such methods, which is why it was decided to abandon other goals.
United States is concerned that such attacks could provoke Moscow into launching its own strikes against senior Ukrainian officials.
American officials, according to The New York Times, were disappointed that Ukraine did not share its military and secret plans, especially in Russia.
Sources did not tell the publication which of the Ukrainian government authorized the murder of Dugina and whether President Zelensky approved this mission.
Countries traditionally do not inform other countries about their covert operations, but a number of US officials consider it critical to proactively stop what they consider dangerous adventurism, especially political assassinations.
https://t.me/Media_Post_UA/5294
Resident
The international outcry and the reaction of Zapal forced the Office of the President to curtail the entire program of the GUR with visiting performers who were supposed to hunt for politicians and journalists in Russia. It was decided to merge the entire group and curators of Vovk so that the trace would not lead to Ukraine, but the West was still not satisfied with the situation, which is why the facts surfaced in the media.
There was nothing inherently wrong or dumb about purchasing Russian gas. The problem comes when you start menacing your supplier at the same time. Germany helps a Nazi coup and a Nazi army, supports NATO killing their men, confiscates Russian currency and gold , and supports massive financial sanctions…. When the gas cuts off, they are horrified and conclude Russia was unreliable.
If I go into to McDonald’s and flip the tables and assault the counter workers, I would be refused service. It doesn’t make McDonald’s unreliable. It makes me a jerk.
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