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Michael Hudson on The Euro without Germany

Germany's rapid demise reminds me of German intelligence agent Bachmann in "A Most Wanted Man". He was led to believe he was operating on the same level as the CIA and British intelligence only to realize too late that he was being played all along.

Hudson goes all the way to what the fall of Germany will mean for the euro and what the options are for the countries of the Global South and Eurasia as they try to resist US hegemony.

By Michael Hudson, an economics professor at the University of Missouri, Kansas City, and a research associate at Bard College's Levy Economics Institute. His latest book is The Destiny of Civilization.

The reaction to the sabotage of three of the four Nord Stream 1 and 2 pipelines at four points on Monday, September 26, has focused on speculation as to who did it and whether NATO will make a serious attempt to uncover the answer. Yet instead of panic, there was a great show of diplomatic relief, even calm. The disabling of these pipelines puts an end to the uncertainty and worries on the part of US / NATO diplomats that almost reached a crisis ratio the previous week, when large demonstrations were held in Germany calling for an end to sanctions and the post. to Nord Stream 2 to solve the energy shortage.

The German public was coming to understand what the closure of their steel companies, fertilizer companies, glass companies and toilet paper companies meant. These companies predicted that they would have to go out of business completely - or move operations to the United States - if Germany did not withdraw from trade and currency sanctions against Russia and allowed gas and oil imports to resume, and presumably retreat. by their astronomical increase from eight to ten times.

'Sapere aude'
by Oui (Oui) on Sat Oct 1st, 2022 at 04:22:31 PM EST

'Sapere aude'
by Oui (Oui) on Sat Oct 1st, 2022 at 04:23:50 PM EST
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More Fallout From the Nord Stream Pipeline Attacks

There were questions in Washington as to whether European resolve would hold up through the winter, as well as unconfirmed reports that Berlin and Moscow were even holding secret talks to reopen Nord Stream 1 and begin the transfer of gas through Nord Stream 2.

Now Germany's fate is sealed - as is most of the continent's. There is no longer an off ramp, and Europeans are now prisoners of NATO committed to their own self-destruction.

The US Takes a Victory Lap

Energy companies and traders are making a killing on exporting LNG to Europe with some recording record profits, but the US is now dealing with much higher prices itself. Irina Slav writes at Oilprice.com:

    Meanwhile, however, LNG prices have soared like an eagle, China is re-selling Russian LNG to Europe, and gas prices in the U.S. are three times higher now than they were a decade ago and up 95 percent on the futures market for November 2022 to March 2023.

    Backlash against the LNG exports to Europe have already begun in the US with a group of New England states requesting that Washington help their states rather than Europe.

Due to Germany's demise, the US would seem to salvage some sort of victory from the pipeline attacks even if Russia wins on the battlefield in Ukraine but are still hoping to turn it into a multi-year conflict.

As there's no more off-ramp incentive for Europe, there's now no reason for Brussels not to "fight to the last Ukrainian." Hawks in Washington are rejoicing.

Related reading ...

Biden's Victory Lap at Jackson Hole

'Sapere aude'

by Oui (Oui) on Sat Oct 1st, 2022 at 06:17:46 PM EST
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But Ian Bremmer has accurately been described as "the man with his finger just off the pulse,"  so while the US will benefit in some ways now, the long term might not be so great.

Irish economist Philip Pinkington compares what's about to happen to Europe to the Great Depression and says that even if some European industry moves to the US, it will be a short-term victory.

'Sapere aude'
by Oui (Oui) on Sat Oct 1st, 2022 at 06:58:16 PM EST
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