European Stainless Steel Mills Are Closing Due To Energy Crisis

Yves here. Normally we relegate the tally of sanctions-war casualties to Links, but the fact that another European industry sector, stainless steel makers, is biting the dust, is noteworthy in demonstrating how quickly the damage of high energy costs is propagating through European industry.

Flower-growers in the Netherlands are already wilting. Recall that flowers are the single most important agricultural export for the Netherlands. And as you can see, the damage extends to other greenhouse-grown exports. From Bloomberg yesterday:

The Netherlands, the world’s top flower exporter and one of Europe’s largest producers of fresh fruit and vegetables, is warning of a steep output plunge as crippling energy costs stifle the country’s extensive network of greenhouses.

Royal FloraHolland, the world’s largest flower market in Alsmeer, estimates Dutch flower production will drop by up to 40% between Christmas and next spring due to the rising costs of maintaining greenhouses, spokesperson Michiel van Schie told Bloomberg.

The expenses of heating and lighting the glass structures that sprawl over an area equivalent to 17,000 soccer fields now make up as much as 70% of the cost of most greenhouse crops, more than double that for last year, according to industry group Glastuinbouw Nederland….

Soaring costs are also making the sale of energy contracts to other users more profitable than growing plants as agreements signed later in the year are expected to be even pricier. “I was told of one farmer who sold his energy contract, which he’d fixed for several years, for 35 million euros,” Schie said.

The drop in production means growers in sunnier climates such as Spain and Morocco are likely to grab a share of lost output from the Netherlands, a lucrative market where exports of greenhouse produce amounted to 9.2 billion euros ($9.5 billion) in 2020. Nevertheless, any shortages will further stoke inflation across Europe, where food prices have already soared 11% from a year earlier in a cost-of-living crisis that shows little sign of easing.

And speaking of not easing, Gazprom has not turned Nord Stream 1 on schedule, with the EU screeching bad faith. Even if true, perhaps they should consider returning the central bank assets they took to square the ledger?

Unlike the reduction in flow to 60%, which Siemens tacitly admitted was due to a turbine taking a trans-Atlantic trek for repair, and the next ratchet down, which Siemens did not challenge, this time the German giant challenged Gazprom’s position. From the Financial Times in Russia indefinitely suspends Nord Stream gas pipeline to Europe:

The company said the shutdown was because of an oil leak discovered in the main gas turbine at the Portovaya compressor station near St Petersburg, which feeds the line that runs through the Baltic Sea to Germany.

However, Siemens Energy, which manufactures and maintains the turbines that power the pipeline, cast doubt on this explanation.

“Such leakages do not usually affect the operation of a turbine and can be sealed on site,” the German company said. “It is a routine procedure during maintenance work. In the past, the occurrence of this type of leakage has not resulted in a shutdown of operations.

“Irrespective of this, we have already pointed out several times that there are enough additional turbines available at the Portovaya compressor station for Nord Stream 1 to operate,” Siemens Energy said.

To play devil’s advocate, it does not appear Siemens has been on site. And Russia has been complaining for weeks that there are other turbines at the Portovaya compressor station that need to be repaired that it can’t send out since Gazprom has not gotten a proper sanctions waiver and other documentation for its globe-trotting turbine, so it’s not clear how many of the backup turbines, if any, are actually in working order.

Moreover, given Stuxnet, if I were Gazprom, I’d be very nervous about reconnecting any equipment that was out of my hands after the war started in an unfriendly country, particularly given how long the turbine was held in Canada. From Wikipedia:

Stuxnet is a malicious computer worm first uncovered in 2010 and thought to have been in development since at least 2005. Stuxnet targets supervisory control and data acquisition (SCADA) systems and is believed to be responsible for causing substantial damage to the nuclear program of Iran. Although neither country has openly admitted responsibility, the worm is widely understood to be a cyberweapon built jointly by the United States and Israel in a collaborative effort known as Operation Olympic Games.

Stuxnet specifically targets programmable logic controllers (PLCs), which allow the automation of electromechanical processes such as those used to control machinery and industrial processes including gas centrifuges for separating nuclear material. Exploiting four zero-day flaws,[6] Stuxnet functions by targeting machines using the Microsoft Windows operating system and networks, then seeking out Siemens Step7 software. Stuxnet reportedly compromised Iranian PLCs, collecting information on industrial systems and causing the fast-spinning centrifuges to tear themselves apart. Stuxnet’s design and architecture are not domain-specific and it could be tailored as a platform for attacking modern SCADA and PLC systems (e.g., in factory assembly lines or power plants), most of which are in Europe, Japan, and the United States. Stuxnet reportedly ruined almost one-fifth of Iran’s nuclear centrifuges. Targeting industrial control systems, the worm infected over 200,000 computers and caused 1,000 machines to physically degrade.

And this row over Nord Stream 1 ignores that Russia has repeatedly offered the use of Nord Stream 2 at a capacity level that could fully substitute for Nord Stream 1. A big motivation for Russia to move distribution to Nord Stream 2 is that Russia does not depend on foreign contractors to maintain the system.

Given the offer of Nord Stream 2, I find it hard to take EU leaders’ whinging seriously, even if Russia is engaging in “dog ate my homework” level excuses about shutting off Nord Stream 1. They see the announcement of G7 plans to implement their barmy price cap on Russian oil as the reason for Russia’s action.

As as aside, it appears not to have occurred to the G7 that this scheme is also aimed at the Saudis. If Russia were to capitulate, the price cap would greatly undercut Saudi oil. Even though the Russians have simply said they won’t sell oil to countries that try to dictate prices, the Saudis could signal their unhappiness with buyer efforts to muscle prices by cutting production.

As Kevin W noted by e-mail:

I’m thinking that the Russians have had enough because of the refusal of the EU leadership to start any negotiations and have now turned up the pain dial to 3. And that crackpot raid on that nuke plant was the game changer, particularly how that story has been so heavily censored in the west. That and that oil cap idea not going away.

With the Russians, the US has earned itself the moniker of being agreement-incapable but is there a Russian word to describe negotiation-incapable that they could label the EU with? Long term it may be better for the Russian to do this or else there won’t be much industry left in the EU by spring.

A final reason for the normally patient Russians to be engaging in tit for tat is Ukraine is shelling the pumping operations that provide water to Crimea:

By AG MetalMiner, the largest metals-related media site in the US according to third party ranking sites. Cross posted from OilPrice

  • Stainless steel mills are closing across Europe due to the  ongoing energy crisis.
  • Around three million tons of Europe’s stainless steel capacity is at risk.
  • This sort of “commodity” standoff is less than ideal.

Stainless steel prices continue to struggle as we approach the final quarter of the year. Meanwhile, nickel prices float just above their 2021 average, closing August at $21,320 / mt. Both indices seem to indicate an overly-cautious marketplace, with buyers and sellers seemingly waiting to see what the other will do.

This sort of “commodity” standoff is less than ideal. MetalMiner has recommended that buyers of flat-rolled stainless expect lower transaction prices as we move into autumn. After all, alloy surcharges are low, and competition between service centers is higher. In fact, many U.S. flat-rolled mills have no customers on allocation, thanks to imports affecting overall supply.

Still, the battle between supply and demand is a never-ending one. And in a tight market full of people looking to maximize their dollar, anything can happen.

Stainless Steel Mills Shut Down Across Europe

What would happen if the stainless steel market suddenly lost millions of tons of production? We won’t have to wait long to find out the answer because it’s already happening. As August ended, more and more reports came in detailing European stainless steel producers having to scale back or shut down production altogether.

Of course, Europe faces a catastrophic energy crisis. While many economists remain focused on the coming winter, Putin’s retaliatory gas cutoff has done plenty of damage already. So far, around three million tons of Europe’s stainless steel capacity is at risk. With energy costs surging, many plants simply can’t afford to “keep the lights on,” so to speak.

Earlier in August, the Belgian Aperam Mill shut down its mill in Genk. Soon after, they reduced production at their Chatelet Mill. More recently, Spanish company Acrinox announced it would cut production and place around 85% of its employees on short-time work. Obviously, all eyes are now on other major European producers, many of whom have just as much incentive to cut and run.

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  1. Louis Fyne

    won’t be long before other shoes drop and USAers will be hit….

    at the right price, Proctor & Gamble will decide to start shipping US/CA-made paper products to Europe cuz of EU factory shutdowns.

    Yesterday, bought toilet paper at the Mega-Lo Cost Warehouse for the first time since February, price for my brand went up 31% in 6.5 months, and we still haven’t seen the worst yet.

    Paper products, canned food, flour, etc. at the right price stuff will be diverted from the US to the EU

    1. Glossolalia

      I’m told that Americans will be willing to tolerate all kinds of shortages in order to support Ukraine and punish Putin.

    2. Irrational

      According to Reuters, Arcelor Mittal is closing 1 of 2 furnaces at its Bremen steelworks and will shut down the direct reduction plant in Hamburg from Q4.

      1. Cecilia Clementel-Jones

        Dear yves. it took me some time to realize that, like myself, you are a woman and you live in Italy. Have spent 30 years of my life in London, can read/write French and read Spanish. I am willing to try and cover the area of Southern Europe for you. I have stopped reading Italian papers till Election day but for you and N C I can make the effort to start again and can deliver good commentaries. Can we get in touch? All the best

  2. fairleft

    Let’s hope the predictably failed Kherson offensive, thousands of Ukraine infantry in open grasslands slaughtered by Russian artillery, will disgust Zaluzhnyy and Ukraine’s higher command enough to get Zelensky overthrown and peace negotiations started.

    1. ambrit

      The unspoken factor in all this is the status of the Far Right militias embedded in the Ukrainian military forces. So far, we have seen these forces described as functioning as ‘enforcers’ of the Five Eyes will within the armed forces of the Ukraine itself. These Rightist units can also be used as ‘enforcers’ of the “Western” will within the civil administration of the Ukraine as well.
      The Russians are absolutely right in making the ‘De-Nazification’ of the Ukraine their number one priority.

      1. Michael Fiorillo

        And when they lose against the Russians, those Nazi bastards will be imported (for “humanitarian” reasons, natch) and used as enforcers here in the US and Canada…

    2. ChrisPacific

      As flawed as Zelensky is, I don’t think it would be a turn for the better if he was overthrown. There would at that point be no democratically elected leader in Ukraine, and the country is hardly in a state to conduct any kind of election to a proper standard. NATO and the US would waste no time in picking a successor and setting them up with a puppet government – quite possibly from one of the neo-Nazi factions, since they can be reliably counted on to oppose the Russians. The new government would be supported by NATO countries and US allies and denounced as illegitimate by Russia, and likely China and India as well depending on how rancid the new government and process of appointing them was.

      With no democratically elected government and only a puppet NATO government that wasn’t recognized by Russia, the only hope of peace would then be direct negotiation between NATO/US/EU and Russia. Needless to say, that’s not much of a hope. We could be looking at a Libya style failed state and decades of war in that scenario.

    1. ambrit

      One of the most energy intensive industries is aluminium smelting. Go long aluminium foil.
      Another such industry is cement powder production.
      The impossibilities are endless.

      1. chris

        Aluminum smelting and raw bauxite processing are already casualties of the sanctions. I’d go long places like Iceland with significant geothermal resources. I’d also look into the places in Utah and California that are experimenting with building new kinds of distributed power generation centers and “virtual power plants”.

    2. Paul Jonker-Hoffren

      I studied the labour union of the paper industries in Finland for my dissertation, and you can find the summary/introduction here:

      (the link points straight to page 49). For the graph there, I used the World Input Output Database (the latest/final release is here:, and until 2008 at least the imports from Russia in terms of value, for electricity and oil category, were increasing. I assume this trend has continued even though some Finnish plants were shuttered. Unfortunately I don’t have the Finnish Forest Industries Statistics handbook anymore, would be easy to check.

      But I think you are right.

  3. Petter

    So, clicked on The Guardian and read that the EU expects Moscow to ¨respect its energy contracts.¨ Really?

    1. chris

      Yeah, I find reading the Guardian lately is a great view into the mind of the global elite. They seem to be struggling to hold two conflicting ideas simultaneously which they acknowledge they themselves would never agree to:

      (1) we can sieze whatever assets other people own for any reason we want.

      (2) there will be no legal or other repercussions for illegally siezing other people’s assets.

      You should be able to acknowledge that Russia attacking a country like Ukraine was wrong (despite numerous provocations) and also acknowledge that Western sanctions/seizures of Russian assets were wrong. Or, if you seek to defend Western sanctions, then you have to accept that Russia is free to respond in equal measure. The apparent shock that the West seems to have over the Russian response is embarrassing. The fact that the sanctions have so obviously backfired AND the West refuses to back down is horrible.

      I keep saying this, but I really can’t believe no one thought about the impact of Russia cutting off gas flow to Europe. I can’t believe that we supposedly suspected Russia would invade Ukraine for months and in that time did not prepare for war or reciprocal actions from Russia that would affect us far outside of Europe. I can’t believe we expected the entire world to go along with the US after treating the entire world like trash for decades. But it appears that is what happened. The US assumed it was still 1992 and are surprised a lot has changed in 30 years. We’re functionally insane.

      Which means I guess we’ll see a large percentage of Europeans freeze and starve to death this winter unless multiple governments are replaced. And even then, I can’t imagine Russia relenting. Even if they wanted to, even if Russia cared to prevent the suffering that those foolish Europeans were so dedicated to inflicting on their own, why would they? The best lesson for Europe from a Russian perspective might be to suffer this way so they never again agree to this kind of mad proxy war.

      I have no hope that the US will ever learn from this experience. We’ve already condemned more than a million people to die from COVID. Our officials are OK with an additional yearly sacrifice of 300k to 700k from COVID. We’re OK with killing about 60k people each year due to a lack of universal healthcare and despair. Our great financial minds are advocating for 10% unemployment for two years to break the supply induced inflation we’re experiencing, even though they have to know that every 1% of unemployment correlates to roughly 40k deaths. We won’t stop engaging in this behavior until there is no one left to die.

      1. Frank Miata

        It is always a question of who is dying. Which zip codes get the corpses,makes for the ultimate reality check.

  4. gabon 45

    Between Nickel and NG – Russia has strong low cost resource position for 100 years which in time will allow greater – market price control – as downstream integrated processing moves out of the EU to Russia and then south to China for more labor intensive products.

    But this will occur across the board for various other industries like cars, glass making, wood products, and many more.

    The golden age of commerce for Russia & China and their partners is in motion. The EU will be a giant continent wide tourist haven like Disneyland and a place to study the civilizations that came before us.

    For some reason of control of labor, the allowance of citizenship for the Muslim refugees was supposed to lower labor costs but that was never the core of marginal cost – resources – were the epi center and now the mask is off. The worst is happening – labor not necessary but must be serviced as welfare and no economic resources. Kind of amazing decision making for what they call Elites.

  5. Dave in Austin

    The longer wars last the more vengeful the actors become. The list is long: Sherman’s March to the Sea in 1865; the German response to the 1914 food embargo; the “Baedecker Raids” of 1942 that destroyed many British and German historical cities; the 1945 fire bombing of Japan… all were designed to inflict pain, wreck economies and impose costs on civilians; they were only marginally associated with the actual conduct of war.

    Now we have war against the economies heating up again. In the past 24 hours Europe “imposed price caps on Russian oil” and Russia responds with what might be called “volume caps on natural gas”. Also today Ukraine shelled and destroyed the pumps that pump water to the Crimea. Russia responded by shutting down the nuclear plant they control that provides four million Ukrainians with electricity.

    As in WWII, the war against the opponents’ economy and standard-of-living escalates as time goes by. These force unpalatable choices. Will EU energy be used to produce industrially important stainless steel or job-creating Dutch flowers? Who will be worse off this winter, Ukrainians without enough heat or Crimeans without enough water?

    Meanwhile, with all those important events (and many others) going on today, the five lead stories on my online NYT opening screen are, in order:

    Abortion Pill Providers Are Pushing Legal Boundaries to Meet Surging Demand;
    How Much Does That Oligarch’s Yacht Actually Cost?;
    ‘We Do Not Want Unknown Graves’: The Struggle to Identify Bucha’s Victims
    These 21 vegetable recipes are a thrill to grill during Labor Day weekend.
    Would you give a 280-pound baseball player $300 million?

    Enjoy the last days of summer. Fall and winter are coming.

  6. Michael Hudson

    So the Ukraine war is like a McMuffin in a Hitchcock movie: It was just an opportunity to be a catalyst to get the plot started — the plot being WW III to decide whether the world is going to have fascism or socialism, with the real battlefield being economic, energy and food trade.

    This attempt to “isolate” Russia — by driving it together with China, India, Iran, South America and Africa into a non-dollar block — was the plan all along. Ukraine was just the excuse.
    Isolating Russia is like the headline, “Heavy fog in England. Europe cut off.”

      1. chris

        No, I like the idea of this all being a McMuffin. That would mean this war was mass produced by corporate elites who don’t care about the health of those who consume it, capable of being shelf stable for eerily long periods of time because the ingredients, while hidden from the public, aren’t natural and have to be produced using supply chains that damage people living close to the main production centers. And all the people, too tired and harried to make different choices, just grab one and go to their job, thankful they at least got a bite to eat before their shift.

        Sounds right to me…

        1. Skip Intro

          I pegged the mistake as an autocorrect intervention. Which makes it more funny that it has created this subtle and entertaining metaphoric juxtaposition. What do we call oracular autocorrect errors? Is a machine capable of Freudian slips? Does Dr. Hudson perhaps type about McMuffins very often, leading the algorithm to misinfer his intentions? (it doesn’t like misinfer, I can tell you that). Is it evidence of intentional product placement strategies? We need a name for AI Freudian slips…

      2. Michael Fiorillo

        You of course are correct, Ashburn, but perhaps it was a fortuitous mistake, and for our degenerate era, McMuffin works better…

    1. Mikel

      The authoritarianism is so off the charts in a variety of countries, it’s hard to see how the most people are going to benefit from any side “winning”.

  7. The Rev Kev

    As these industries shut down, what are the chances that they will be ever be able to open up ever again? Supposing that the energy problem could be resolved – unlikely – how would they be able to reassemble the workforce further down the track. A lot of them will retire or emigrate or be rendered incapable of working due to Covid infections. At that point, if you had heavy duty machinery, the temptation would be to sell it to the Chinese or another nation to cash out. At this rate, Europe will be turned into an inconsequential peninsular attached to the Eurasian mainland which would be nothing less than a tragedy.

    As for Chuck Parrer’s tweet: ‘UKRAINE’S ACE IN THE HOLE: CRIMEA’S WATER: A recent Ukraine precision strike took out a pumping unit at the dam complex at Nova Kakhovka. This was a not so subtle reminder that Ukraine controls the water supply to Russian occupied Crimea’, I don’t think that he gets it. His bio says that he is a ‘former SEAL Team Six Squadron Leader before getting out to be a NYT Best Selling Author & Hollywood Screenwriter. I was never a soldier but my instinct would be to take over much more of Ukrainian territory to push the lines north so that that dam would be out of range of their artillery. Net effect? The Ukraine loses more territory not because of a tactical attack but because of pure spite and revenge.

    1. Bruno

      “an inconsequential peninsula[r] attached to the Eurasian mainland…”

      Or, as Joyce put it (second sentance of Finnegan’s Wake): “the scraggy isthmus of Europe minor”

    2. chris

      Speaking as a person who has been involved in those kinds of things…

      It’s entirely dependent on how the factories and production centers are shut down. Some may require certain permits or inspections to restart. Some may need certain consumables to support them restarting. Some may need to wait their turn so that the local grid is capable of supporting a restart. Some may need to wait for a time when ambient temperature or humidity are within ranges to support the equipment restarting. Some may need to wait in line because the expertise and outage crews necessary to support restarts from cold shutdown outages are booked at other sites. But all that assumes things were put to bed correctly.

      If things weren’t shut down following procedures, then all bets are off. They’ll need to do full plant assessments before restarting. The results of those inspections may determine whether it is economically feasible, or materially possible, to restart.

  8. John Beech

    The Rev Kev . . . wonders is facilities will re-open. Respectfully, it’s 100% they reopen a mill for stainless. Why? Simple, it’s because smelting 303 or 304 is an energy intensive operation. While they are loath to shut down the furnaces because of the energy input required to bring them back up to temperature (as opposed to keeping them hot), turning the plant off for six months doesn’t hurt anything. In fact, there are going to be benefits as deferred maintenance is accelerated. Point being, it’ll come back better than ever. That, and don’t overlook corporate’s desire to put workers in their place and use this as an excuse to rejigger pay and labor’s power. Me? I wouldn’t put it beyond them, take my meaning?

    As for Russia shutting down NS1 and dangling the carrot of NS2, does anybody doubt the western governments are now more keenly aware than they were two years ago of what dependence on Russia actually means in terms of dancing to their tune?

    Me? When I have my tin foil hat on I further suspect LNG, which remember we have the ability to ship, along with passing legislation a few years back allowing us to sell abroad is quite likely the ‘why’ behind the governmental moves we made which saw this whole Ukraine business develop. After all, it’s not like President Putin didn’t warn as surely as a rattle snake he was being backing into a corner.

    As for shelling the water supply to Crimea, it seems to me Russia has been quite disciplined about not destroying infrastructure in Ukraine (electricity, water, internet remains). These are obvious targets when subjugating nuless you wish to maintain some hearts and minds. Thus, the whys and wherefor’s for Russia staying their hand are obvious. However, Ukraine has fewer compunctions, which have been clear since they began dropping butterfly munitions in the Dombas and most recently, shelling the Zaporizhzhia Nuclear Power Plant in Enerhodar.

    What a mess.

    1. c_heale

      The first paragraph assumes the countries concerned will ever have enough energy to open them again. There’s no certainty that they will. And will the war be over in six months? Given the progress on recent wars, it may be nearer six years.

      And finally, if they can’t supply steel, then companies will turn to other suppliers. They will might have to start from scratch in building up their markets. No customers, no reopening.

  9. Ignacio

    I think Kevin W is more that right. If anything the comment falls short on how tired the Russians possibly are about the West. It is not only that the obsessive West is utterly unable no negotiate anything. Russians must realize that the ultimate goal will always be the destruction of Russia and bringing the remnants to be looted by the West. Facing an existential challenge the Russians are the ones armed with the necessary resolve to prevent it at any cost. They endured the Revolution, then the Nazis, and later the after Soviet Union looting by the West. Besides, the harm that makes them unable to buy iPhones or Volkswagen auto parts is nothing but a itchiness they can scratch without suffering too much. At least compared with the effects on the other side when scarcity of energy and raw materials results in unavailability of… Volkswagen auto parts in Europe as well. If one day the Germans beg the Russians to, please, open the spigots at NS2, the Russians will have all reasons to say niet. since that would only reinforce the resolve and power of their enemies.

    The West is turning evil fast and furious. Did we send the Blonde Clown to Kyiv to convince Ukrainians that an attack was necessary around Kherson? For what reason? Send the ducks to check if the Russians are running short of ammunition? If the answer to the first question is ‘yes’ West’s evil has just doubled (and not wanting to report on such ugly event).

    Some have commented that at any point, Europe could reverse, achieve and agreement, put an end to the war and even claim some kind of victory. IMO, this is no longer a possibility. This can only end with total defeat of the other part, most likely Ukraine, then the EU as a domino piece. Russians will never, never again, trust in any kind of agreement with the West. The Borrells of the word cannot be more mistaken. What has been done is irreversible. The road ahead is doubling down in mistakes and evil, possibly ending in tragedy. The west leadership is in obsessive-compulsive mode and even if they realise they are not behaving reasonably they have no control of their reactions. You can see the obsessive compulsion with sanctions. Once and again the same mistake as if, for instance, denying visas to Russians would be any help for Ukrainians. It is mistaken, it is evil, we know it, but nothing can be done about it except repeating all over again.

  10. Mira Martin-Parker

    I’m curious how Gresham’s Law relates to the use of energy (oil, nuclear power, electricity, etc.) as a form of currency. If it is used as a form of currency, and it is thus treated as equal to all other forms of currency (fiat money, gold, etc.), when in actual fact it is not equal to these other forms, won’t it have the effect of eventually driving out the other currencies? Energy is not equal to traditional symbolic currencies as it directly grants its possessor disproportionate access to physical power as a means of social control, rather than the mere symbolic power (i.e. seductive influence) granted by traditional currencies? Members of society are free to reject the seductive influential power of traditional currencies, but they are not free to reject the actual power of those with a monopoly on power itself (i.e., Might Makes Right). If energy is used as a form of currency, won’t the one in possession of a monopoly on it drive out those in possession of the mere symbols of power traditionally used as a means of social control throughout time, i.e. money?

    P.S. Someone please tell Thrasymachus I’m not a member of the middle-class nor into neoliberalism? Just a poor pathetic writer. Thanks.

  11. Gulag

    The golden age of globalization now appears to be over. Trust between traditional trading partners(China, U.S. Germany, Russia) is disappearing and traditional supply chains are more and more tenuous.

    The geo-political war in Ukraine and the economic war against Russia and China is about control– of buffer zones, (like Eastern Ukraine), of technologies (like chips), of commodities (like gas), of production ( like zero-covid) and of straits like the Taiwan Strait, the Strait of Hormuz and the Bosporus Strait– for brilliant detail see Credit Suisse Economics, Zoltan Pozsar “War and Industrial Policy,” August 24, 2022)

    The real battle will not be between socialism and fascism but between alternative forms of State capitalism as practiced by Russia, China, Turkey, Iran, U.S. England, and Germany–think of excessive operating leverage in terms of supply chains (for example, $2 trillion of value added German production dependent on $20 billion of cheap gas from Russia–thats 100 times operating leverage–much more than Lehman’s) with triggers being the implosion of such supply chains caused by the lack of inventory/rising prices and lack/difficulty of military protection.

    Unlike the financial crisis of 2008 where a financial hegemon (the U.S. Federal Reserve Bank saved the world-wide banking/financial system–the current political hegemon–the U.S.– no longer appears hegemonic in its capacity to protect/save supply chains or straits.

  12. VietnamVet

    For a while, if western rulers could see reality, there could have been an armistice and DMZs built to separate Russia from Western Europe, but it is too late. Russia’s flow of natural gas to Germany is halted. The top 1%’s hubris and arrogance that subjugated Greece and dismantled western democratic nations has run into a war that they cannot fight. Sovereign governments that mobilize and command its people, resources, and industry to win the conflict are no more. The Davos Elite cannot, will not, nationalize Europe’s energy companies to prevent blackouts and death this winter. The chaos will only continue to grow worse as the war progresses. Germany could lose its third world war in a row. This time due resource depletion, climate change, and the possibility of a global nuclear war; there may be no coming back.

    Nothing shows the disconnect better than President Biden’s speech at Independence Hall staged in Leni Riefenstahl triumphal red. He blamed everything on the 74 million Americans who didn’t vote him. They are scapegoats for his own Administration’s failures not to mitigate the coronavirus pandemic and provoking Russia’s invasion of Ukraine which has ignited an extremely dangerous proxy world war.

  13. Kent Y

    The Tesla Cybertruck has been delayed for years, but was supposed ship in 2023 and have a body made entirely of stainless steel…

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