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Russian Gas and Europe’s Forced Hypocrisy – PC Trends

The economy, under its appearance of seriousness, behind its graphs, its curves and its figures, is in reality also a terribly human science. Moreover, it is enough to auscultate the news to realize it. Take the case of the euro: our European currency is currently too weak against the greenback. This in itself is a punishment because the hydrocarbon invoices are denominated in dollars. In other words, each weakness of the euro against the dollar increases our hydrocarbon imports and therefore our imported inflation.

The economy, under its appearance of seriousness, behind its graphs, its curves and its figures, is in reality also a terribly human science. Moreover, it is enough to auscultate the news to realize it. Take the case of the euro: our European currency is currently too weak against the greenback. This in itself is a punishment because the hydrocarbon invoices are denominated in dollars. In other words, each weakness of the euro against the dollar increases our hydrocarbon imports and therefore our imported inflation. As you know, the European Central Bank recently increased its interest rate to make the euro more attractive, and thus indirectly weaken imported inflation. The catch is that this interest rate hike was in vain – I almost wrote useless. The reason? The euro has not moved too much. Normal, forex traders are not stupid, they know that Europe is worse off than the United States economically. First, because our territory is close to the conflict in Ukraine. Then, because we are dependent on Russian gas. And in the end, because the dollar yields significantly more than the euro. And so, for all these reasons and more, traders prefer the greenback to the European currency. Today, it must be noted, it is the dollar which is the safe haven and not the euro! Currency traders also know that Europe will not be able to raise its interest rates too much given the Himalayan size of our public debts. Indeed, interest rates that are too high are the assurance that Italy will go off the rails. However, it is hard to see how Europe could support the bankruptcy of the third largest economy in the euro zone. Meanwhile, the ruble is also at its highest against the euro, while our politicians had announced its collapse! Ah yes, let’s also talk a bit about the forced hypocrisy of the European Commission. Everyone knows that Putin decided to shut down the Nord Stream 1 gas pipeline. Officially for maintenance reasons, but in reality to strangle our economies and force us out of Ukraine. But as Philippe Béchade, a more than seasoned commentator on the Stock Exchange and its upheavals, points out, this gas closure from the north has made us forget that this Russian gas continues to circulate further south, via Romania, Hungary and Poland and to another country which is none other than… Ukraine! In other words, and this is what is disturbing in this conflict, is that Putin forgot to destroy the installations which transport Russian gas to the West. Worse still, still according to Philippe Béchade, Russia continues to pay money to Ukraine, in the form of royalties to transport its gas, which allows this country to finance its war by buying American military equipment which it uses against Russia, while supplying gas to its European “enemies”, members of NATO. However, these same European countries have officially decided to do without Russian gas. But since they cannot do without it 100%, they turn a blind eye to anyone passing through Ukraine. Of course, there is no question of officially admitting this subterfuge… To believe that at the school of hypocrisy, Europe is valedictorian. But beyond the bitter observation, did we have a choice?

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