The Coming Anti-Americanism
That guy in the photo is a Hungarian yurt builder. He's doing good business in Hungary these days. More and more Hungarians are moving into yurts (Mongolian-style tents) because they are cheaper to heat than regular homes (see the television report here). That's right: the energy crisis is driving Europeans in an industrialized 21st-century democracy to move into tents for the winter.
"I hate to tell you this," said the Hungarian across the table from me today, "but there are a lot of Hungarians who really hate the United States these days. They think you are trying to destroy Europe."
I hear this kind of thing more and more -- cab driver from the airport the other night said he is angry at Russia, but also angry at the US for provoking Russia -- and not just in Hungary. Most Europeans were solidly behind Ukraine, but with winter barreling down on them like a freight train, more and more of them are wondering why, exactly, they have to watch their economies destroyed to achieve Washington's anti-Russian foreign policy goals.
Today I was in a restaurant in Budapest that has seen its electricity bill shoot up by 600 percent in recent months. It's almost certainly going to have to close this winter. Factories are closing all over Europe now. Even a major toilet paper manufacturer in Germany went bankrupt because of energy costs.
According to Deutsche Welle, Europe as a whole depends much more than the US or the UK on industry. See this:
Notice too that these energy-intensive industries account for 75 percent of Germany's industrial energy consumption:
Germany is the engine of the European economy. If it goes down, it's going to take a lot of non-Germans with it.
A Czech friend writes:
The oldest Czech glassmaker in Harrachov (310 years in operation) just shut down because of energy prices. The extent of the domino effect is astonishing. We live in the most metastable society in human history (or perhaps not, but we certainly know nothing about those) and it’s about to crash. It did not have to go this way. With a little foresight, we could have made our societies stable but that went directly against the capitalist modus operandi: quick, big and short-term gains.
He goes on to say that every day in Czechia, formerly stable, successful business are shutting down because of the energy crisis, putting more and more people out of work. The state will have to print money to pay the unemployment benefits, and that in turn will cause hyperinflation, and more misery. European publics are going to wonder why they see their livelihoods ruined, and their economies destroyed -- and then they are going to look for someone to blame: their own governments, yes, but also the United States, which many people here see as frog-marching Europe into violating its own national interests for the sake of American geopolitical strategy.
My Czech engineer friend recommends this Fabio Vighi essay as a guide to the crisis. Excerpts:
Putting an end to monetary expansion is like provoking a cardiac arrest. If the money supply curve declines or even flattens, our world experiences convulsions, withdrawal symptoms, and goes cold turkey. Eventually, it collapses. With a grotesquely over-leveraged financial industry like ours, the entire economy and social fabric is hanging on the edge of a cliff. The choice faced by most countries, including the affluent ones, will soon be either default or hyperinflation of the currency needed to repay the IOUs. This means that capital accumulation itself is now on life support, as its managers are caught in what can only be described as a lose-lose situation. On the one hand, they know that they must find reasons to pull more liquidity (debt) into the present by dint of what is conventionally known as “printing it.” On the other, they also know that this hardly original escamotage can only lead to runaway inflation, and then hyperinflation. What takes place today as a matter of monetary normality used to characterise wartime economies, namely direct financing via the money presses. While this can only result in depressing the real economy, simultaneously generating the highest wealth inequality on record, what should give us pause is the thought that a world hostage to bubble inflation inevitably “melts into thin air”, losing its social grounding as well as the language to articulate any form of resistance. Collapse is at once economic, socio-political, and cultural.
In the meantime, the globalized West is engaged in a wacky race to the bottom. Europe is leading the way, thanks to the all-too-predictable backfiring of the sanctions against Russia. Having made itself dependent on Russian gas, Europe has scored the clumsiest of own-goals – intentionally? For how could European leaders who invoked and even engineered the draconian sanctions (while also hoping to continue to buy Russian gas on the sly) not see that these sanctions would boomerang to hit Europe on the head? It is either a case of extreme incompetence, blind submission to external (US) dictates, or deliberate self-immolation – perhaps a mix of all these. The likely outcome is that as soon as the recession is officially declared, and new social restrictions are in place, we are going to see Central Banks moving from hawkish (rate-hiking) to dovish (rate-lowering), i.e. the Fed & Co. will return to a policy of more inflationary large-scale asset purchases and cheap money.
The only other available option is running the markets to the ground through sustained and significant rate hikes. This scenario would be deflationary, but only at the cost of a sudden and devastating depression pulverising capitals both in the financial markets and on the ground, causing sweeping job losses, business closures, rioting, looting, and so on. If liquidity does dry up, we will hit the deflationary spiral, like drink-driving at full speed against a wall. Whatever can no longer be financed through credit will be brought to a standstill. Banks will refuse to lend and bank accounts could be frozen. Deflationary capital destruction through the meltdown of debt & stock markets would annihilate currencies and livelihoods. The least one can say is that for this to happen as a controlled accident, reliable (authoritarian) countermeasures aimed at controlling social unrest must already be in place.
Whatever happens, we will continue to see a drastic devaluation of fiat currencies, and the rapid dissolution of the social bond. As I see it, the endgame involves two main strategies: 1. The manipulation of a continuous stream of fear-inducing global emergencies, whose ultimate function is to shift the blame for systemic implosion onto some external agent while ushering in 2. A novel social-credit system (or rating system) based on mass immiseration and CBDC (Central Bank Digital Currencies), which are now being tested in more than 100 countries.
Read the whole thing. As a reminder, I don't know much of anything about economics, so I'm not endorsing Vighi's predictions. I'm just throwing them out there for y'all to discuss. It has been my view for some time that if we have a major economic downturn and subsequent street turmoil, the State will use that as an opportunity to impose a social credit system as a way of controlling us. If they can make CBDCs part of that, and justify it on grounds of both safety and "equity," or some other progressive buzzword, we're in serious trouble. The Live Not By Lies scenario will no longer be creeping up on us; it will have pinned us to the ground and be jumping on our collective chest. This could all happen very quickly.
I mentioned to you before that a senior European government official told me not long ago that the energy crisis is much worse than people realize, and that governments on the Continent could fall because of the coming convulsions this winter. Even if that apocalyptic scenario doesn't materialize, there is still going to be a world of hurt ahead for the people here. Depending on how things go this winter, a period of deep strain within the NATO alliance may be ahead. If large numbers of cold, hungry, jobless Europeans take to the streets after Christmas, will they mostly blame Moscow for their immiseration, or will they mostly blame Washington? If you think that's a silly question, you're not listening to Europeans.
One more bit from my Czech friend, who is very, very conservative:
It did not have to be this way either if the idiots in the State Department had not exported their insane ideologies to all corners of the earth and alienated pretty much anybody with two brain cells to rub together. It is quite amazing how many Czechs show quite a bit of understanding for the Russians (if not being openly pro-Russian); the Czechs are not known as pro-Russian shills. But perhaps it is meant to be this way. I miss the world of Reagan and JPII. Moral clarity. The US has not been a force for good for quite some time.
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UPDATE: This war is more complicated than the US ruling class would have you believe:
UPDATE.2: New poll shows three-quarters of Americans believe the US should keep supporting Ukraine despite threats of nuclear war. I don't get it. Do people really understand what's at stake here? Have the US media actually explained the whole story to them? Or is this another case of the American public happy to support a war when they don't believe they are going to have to pay any costs for it?