Via P Gosselin
By Fred F. Mueller [Berlin]
During the months-long drumming for the big Jamboree of the climate fanatics in Sharm el Sheikh a few weeks ago, politicians, NGOs and the mainstream media did their best to cover them up. cover up an inconvenient truth that will preoccupy us for a long time to come: the great recession that our countries’ climate policies have caused us.
This undeniable fact can be seen clearly when looking at the Nasdaq, which is a pretty good gauge of the state of the economy and the severity of downturns:
Figure 1. Nasdaq as of January 1, 2005
The chart shown above can be compared to the fever chart of a patient in the hospital. It is a pretty good indicator of the state of the economy reflecting the ups and downs and their severity.
Over the past 17 years, ignoring some minor disturbances, we can identify three major obstacles related to specific events. Their severity cannot be directly deducted by comparing the absolute difference. This is due to the fact that over time Nasdaq suffered from continued growth due to the increase in the collective wealth of US shareholders. It is therefore more appropriate to assess the severity of such a drop by calculating the relative difference between the maximum and minimum values before and after the event, respectively. This gives the following result:
Subprime crisis: -24% decline, lasting 4 months and 10 days
Covid shock: -30 % discount, 1 month term
Energy crisis: -16 % decline, lasting 3 months
Ukraine War: Decline -23%, lasts 9 months and continues
The last two places on the list should be viewed as a cluster where, especially in the second period, the energy/economic and war aspects have become inextricably linked. The cluster has so far posted a combined Nasdaq decline of up to 36%, by far the steepest drop in the past two decades. Unfortunately, it is also the most dangerous place, between east and west in a conflict of an intensity not seen in several decades. Far from over, it has the potential to plunge us into a full-blown world war with a nuclear superpower, with possible consequences far beyond the imagination of most people living today. in our countries.
Unfortunately, the main driving force of this cluster has now shifted from economics to the military battlefield, with a spiral of tit-for-tat provocation pulling participants deeper and deeper into an unending quagmire.
The Russian side, initially taken aback by the extent of NATO-led modernization of Ukraine’s military, meanwhile tried to follow closely and find a way to stop the Ukrainian counteroffensive, with heavy losses on both sides. . Both of these developments left their mark on the Nasdaq in the form of a short-term bear market rally:
Figure 2. The ups and downs of the Ukraine war have left their mark on the Nasdaq chart.
The obvious consequence of this fight is an exacerbation of an already bad situation initially caused by the self-inflicted energy crisis that has begun to weigh on the Nasdaq rankings since November 21, three months. before the Ukraine conflict broke out.
The underlying reason is the Western policy of sanctions against fossil fuel mining and extraction companies by restricting their access to financial markets. Shortages of coal, oil and natural gas have inevitably led to the price of these assets skyrocketing, with companies and countries frantically trying to secure supplies of these vital energy sources. . It is therefore not surprising that these prices really exploded when the West decided to boycott one of the largest exporters of fossil fuels. But not for long. Meanwhile, prices have shown deep declines not only for oil and gas, but also for most mineral commodities.
Recession has entered
At first glance, the reason for this confusing trend is that the markets involved appear to be expecting a prolonged and severe recession. Falling industrial activity means falling demand for all commodities and these expectations have dragged down prices. The severity of the situation is highlighted by the fact that even the remarkable OPEC+ production cuts have not stopped oil prices from falling below the $80 mark.
more difficult
The combination of misguided energy policy and war, which shows no signs of abating any time soon, is a toxic mix that could threaten us all.
From a military perspective, Russia was able to block the recent advance of the NATO-backed Ukrainian military. The current situation is reminiscent of the icy front lines of the First World War, with large-scale gun battles and fierce disputes over trenches that are constantly changing hands. Some sources suggest that Ukraine’s current losses amount to 1,000 soldiers killed or seriously injured per day, a rate the country may not be able to sustain forever. Despite this fact, the West has chosen to hand over the decision of peace or war to the Ukrainian leader, whose precondition for peace negotiations is to demand an unconditional surrender of Russia. Some consider him a fanatic who wants to fight to the end. And we swore to support, “no matter what”.
Meanwhile, the economic and social consequences of the recession exacerbated by conflict are growing. The United States and Europe are engaged in a fierce competition to determine who can destroy their economies first – by pouring billions of dollars into “climate-saving” investments into the world. which means nothing more than “immediately” trapped assets.
Worse…
And worse still: unfazed by the drop in stock values that put US pension schemes at risk, the Biden administration is about to unleash a massive trade war with Europe and other allies. through “green” protection schemes such as the electric car subsidy outlined in IRS first) law. We all seem to be heading for exciting times (an old Chinese proverb).
[1] https://www.politico.eu/article/trade-war-europe-us-tech/amp/
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