Posted on 07/17/2022 7:07:34 PM PDT by delta7
The hardest part of living through a time of wrenching change is that nobody particularly bothers to inform you that the times have changed and that nothing will be the same again. Certainly not the talking heads on TV, who are often the last to know. You have to figure it out for yourself if you can. But I am here to help.
It all has to do with energy. Not with technology—that’s incidental; not with military superiority—that’s fleeting and largely imaginary; certainly not with any sort of political or cultural self-righteousness—that’s delusional. There is no substitute for energy. If you run low, you can’t switch to running your industrial economy on fiddlesticks. It just shuts down. What’s worse, energy sources are not even particularly substitutable for each other. If you run low on gas, you can’t just switch to coal or to dried dung, even if you are up to your neck in it. Modern industry runs on oil, natural gas, and coal, in that order, and they can be substituted for each other in very limited ways.
Furthermore, energy has to be very cheap. Oil has to be about the cheapest liquid you can buy—cheaper than milk; cheaper even than bottled water. If energy isn’t cheap enough, then all the energy-hungry industry that runs on it becomes unprofitable and shuts down. That’s the stage at which we are now in much of the world. So, what happened?
Once upon a time the US produced most of the oil in the world. But then the prolific wells in West Texas ran out and Saudi Arabia took over as the biggest oil producer. But the US wasn’t about to take that sitting down and hatched an ingenuous plan: Saudi Arabia will sell its oil for printed US dollars, then take most of those dollars and give them back to the US by “investing” it in US “debt”. Everybody else who needed oil had to figure out a way to earn US dollars to buy it, and any US dollars they had left over after buying oil also had to be used to buy up US debt just because: “Nice economy you have there! Now we wouldn’t want anything bad to happen to it, would we?”
Indeed, a few people didn’t get the message (Saddam of Iraq, Qaddafi of Libya) and got their countries bombed. And a whole lot of other defenseless countries got bombed just to keep the others scared. But then Syria, which refused to get the message too, asked the Russians for help. The Russians helped Syria, and now nobody is afraid of the US any more. Meanwhile, the US became spoiled by all this free money, grew fat, lazy, degenerate and weak and amassed the hugest pile of “debt” (in quotes because there is no question of ever repaying it) in all of human history.
In the meantime Russia, being the largest energy-producing country in the world, decided that it has had enough. Under the old scheme, Russia exported its resources cheaply, spend 1/3 of the revenue on imports and allowed 2/3 to leak out of the country, quite a lot of it also used to buy US “debt”. It couldn’t do anything about this right away, and so it spent the last decade developing its military to a point where now the US/NATO are afraid to go near it and its economy to a point where it doesn’t need much of the imports, at least not for a few years. And then a silly thing happened: the US confiscated Russia’s holdings of US “debt,” making everyone in the world take notice and start dumping it—even the Japanese!—sending the entire financial scheme into a tailspin.
Meanwhile, Russia has started to switch from selling its energy exports for dollars and euros, which then leave the country, where they can be confiscated, to selling them for rubles, which stay inside the country. Do you want to buy some Russian energy? Well, figure out how to earn some rubles! And if your own anti-Russian sanctions prevent you from doing so—well, la-di-da, whose fault is that? Also, given that there is now a worldwide energy shortage, the Russians asked themselves: Why sell lots of oil and gas for a little money when you can sell less of them for more money?
These are not projected developments; they are happening now and in real-time. “Hostile nations” (which is all of the West) now need rubles to buy Russian natural gas and there is a plan to extend this scheme to oil exports. And just a couple of days ago Russia’s finance minister, Anton Siluanov, announced that there isn’t much point for Russia to export anything for dollars or euros since Russia doesn’t need them for anything and advised exporters to start using barter arrangements instead. Barter is rather inconvenient, but if offering dollars (or euros) just gets you punched in the teeth, then that’s all there is left.
What sorts of barter arrangements? Well, for instance, there is a very nice gigantic chemical plant in Germany, the Ludwigshafen Chemical Complex in Germany, owned by BASF, that is about to shut down due to a shortage of its main feedstock, which is Russian natural gas. That equipment could be crated up and shipped off to Russia in exchange for some energy products, fertilizer and other key supplies that the Germans will need to keep body and soul together over this coming winter. Are anti-Russian sanctions in the way? Well, la-de-da again! They are not Russia’s problem; somebody else has to find a way around them.
Meanwhile, lots of dead ideas, systems and institutions are piling up in the West. Dead is the Green New Deal (a scheme concocted by people who know neither physics nor even arithmetic) and the Great Reset, and Build Back Better (whatever that was), and the rules-based international order, and Mutual Assured Destruction (if you ask for it, Russia will destroy it, but how mutual is that?). And we are all standing by, waiting for a shout of “Timber!” when the dollar/euro/yen debt pyramid begins to topple.
The world is also waiting with bated breath for a whole lot of pompous but useless busybodies to disappear from public view. Dumping that pompous blowhard Boris Johnson was a good start, but what about Scholz, Macron, Duda, von der Lyin’, Zelensky and a whole host others? Biden is in a category of his own, since it clearly doesn’t matter who is the US president or even if there is one.
The world has changed, but social reality hasn’t yet caught up with political and physical reality. This is the summer of anticipation. The winter of discontent is next. Come next spring, we will all be living on a strange and different planet.
“d...ebt...there is no question of ever repaying it...”
Is the WEF going to hold a Jubilee Year soon?
“...debt...there is no question of ever repaying it...”
Is the WEF going to hold a Jubilee Year soon?
Those messages before movies are for the Woke because they can’t tell the difference between movies and real life ,LOL
I think Jubilee is inevitable. And I think it will be a very good thing, although painful. Can’t come too soon.
The beauty of my situation is I don’t have to get used to it. Heavy schadenfreude the rest of the way, for me.
It’s weird to me but I just learned within the last month about the centuries old concept of Jubilee which has occurred multiple times in the World’s history in different cultures.
It almost makes sense.
“Well, for instance, there is a very nice gigantic chemical plant in Germany, the Ludwigshafen Chemical Complex in Germany, owned by BASF, that is about to shut down due to a shortage of its main feedstock, which is Russian natural gas.”
Typical hogwash from The Saker.
BASF curtailed some of its products last year due to high natural gas prices. To get around high natural gas prices BASF is building a 120 MW heat pump at Ludwigshafen to produce steam and thermal energy, which will produce more than enough energy to replace its diminishing use of natural gas.
German engineers are among the best in the world, if not THE best.
"The partners are now conducting a feasibility study that should be completed by the end of 2022, they said on Friday [July 1, 2022]."
Don't do the Wimpy thing.
And we’re all just tiny pawns in their arrogant games of chess. None of them are in politics to actually help people. Lord Acton was right. And they should all rot in Hell.
German engineers are among the best in the world, if not THE best.
——-
If so, I hope they build better wood burning stoves….they already announced building “ warm up “ facilities for the masses, ….how’s Senile Joes sanctions working out? The brain dead west never checked to see just how much the west needs Russian energy, food, and commodities…..and Vlad says again, and again, Checkmate….welcome to the new world….
Yes, German engineers are indeed very good, but you missed the issue of the relevant time frame. Nothing will be in place for this winter. Moreover, and more important, the work arounds for replacing Russian energy will take years. Then, there is also the issue of cost.
The EU has cut its own throat through embracing the “Green” delusion and by going along with poorly conceived sanctions. If Ukraine isn’t resolved soon and normal energy transfers restored, there are likely to be uprisings all over the EU. Just one data point, I was talking to a German pilot at the gym today. He told me that he spoke to his family back home, and they and the people they know are panicking because they say Germany is shutting down economically, and there are plans to ration hot water and electricity. They are also very worried about their food supplies. Interesting times.
By the way, this part of the article is almost incomprehensible and wrong:
“Once upon a time the US produced most of the oil in the world. But then the prolific wells in West Texas ran out and Saudi Arabia took over as the biggest oil producer. But the US wasn’t about to take that sitting down and hatched an ingenuous plan: Saudi Arabia will sell its oil for printed US dollars, then take most of those dollars and give them back to the US by “investing” it in US “debt”.”
The issue was not US oil production, but maintaining the dollar as the world reserve currency after Nixon closed the gold window on August 15, 1971. As you may recall, the dollar functioned as the reserve currency after WWII because of the Bretton Woods Agreement, which required a dollar convertible into gold. As a result of Johnson saddling us with Great Society spending and the costs of the Vietnam war, the Fed began printing money, which resulted in inflation. The Nixon adminsitration didn’t, or couldn’t, do anything about all that new spending and the inflation. Finally, other countries became nervous, especially France, and started indicating they wanted to convert their dollars to gold. The gold window was shut because there wasn’t enough to redeem overseas and domestic dollars (like a bank run). Then Nixon went to the Saudis and got them to agree to settle oil trades in dollars in exchange for a promise to defend the Saudis militarily (especially with respect to Iran). That created the “Petrodollar” and preserved the status of the dollar as the world reserve currency, a status that I’m sure the dollar is likely to lose within a few years because of fiscal mismanagement and other forms of bungling by the federal government.
What powers the heat pump?
Inquiring minds need to know.
You left out the best (actually worst) part about what Nixon did/has done to us...CHINA
Not to put too-fine a point on it (the article is extremely biased / pro-Putin), but the article referred to feedstock - i.e., chemicals (such as natural gas) used as input in chemical processes, for example: synthesizing other products, not burned as fuel.
Of course, any natural gas the company had previously burned (as fuel) to generate steam and thermal energy would now be saved, and could thus now be used as chemical feedstock, thus lessening the need for Russian imports, so...
Regards,
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