Germany introduces €200B gas price cap to counter Russia’s ‘energy war’

[MH.Yang]

Thank you, Biden. Thank Hillary. We have just received news from the Chinese Academy of Sciences.

All 8 scientists from the research team of brain matrix and cellular neuroimaging technology of MPG (Max-Planck-Gesellschaft zur Förderung der Wissenschaften e.V.) Institute of Neuroscience in Germany have joined the Research Center for Brain Science and Intelligent Technology of Chinese Academy of Sciences.

Eight top scientists from Germany have submitted their nationality applications to the Chinese government through the channel of China's special talent introduction program. It is expected that they will acquire Chinese nationality within two years.


European politicians are having a good time. But really smart Europeans have started voting with their feet.

 

[jhungary]

I don’t think things will go the way you think it will buddy.

Stop trying beta you won’t ever be white.

Well, first of all, Germany has a very strong Credit Rating, borrowing 200 billion to cap energy price is actually nothing. They had borrowed more during COVID.

Second of all, it's quite clear that Germany is betting on the energy situation will resolve within the repayment period. Depends on their loan term, it may be 2 to 5 years. I would say for certain oil and gas price will go back to normal by then. If not, then I can say it's not just Germany need to worry. It's the entire world, including China.

 

[jhungary]

We don't need the help of any country. We just need to expand the navy until our navy is more than twice the strength of the United States navy.

This is virtually IMPOSSIBLE to do, because US Navy is not for the protection of US itself, it is an international seafaring Navy have a lot of bases overseas (A lot of them are under US direct control)

There is a limit to how much a coastline can support a Navy, China does not have any oversea bases, which mean they cannot expand their navy beyond a certain term. Otherwise, where are you going to dry dock or wet dock your ship when it needed repair? There is only a certain amount of dock available and berth space available with your shipyard. And having 9000-mile coastline vs US 95,471 miles (according to NOAA) would not help.......

On the other hand, US with 130 naval bases (In and out of US) can only sustain they Navy she has, and China have around 70 Naval Base think you can double the size of the US Navy?

I was in China in the 90s when they were talking about how you overtake US Navy on TV, one commentator (I think it was a Navy Admiral) who said, "if US have 11 Aircraft Carrier, China builds 50." Sure, where do you plan to dock those 50 Aircraft Carrier and their escort?

On the other and, US is not Venezuela, it's technology is more advance than PLAN. They stopped making Zumwalt because they see it as waste of money because of the command in technology the US has. Which mean you will need to more than double the size of PLAN to double the strength that of US Navy....US Navy is not a joke, son.

 

[MH.Yang]

Well, first of all, Germany has a very strong Credit Rating, borrowing 200 billion to cap energy price is actually nothing. They had borrowed more during COVID.

Second of all, it's quite clear that Germany is betting on the energy situation will resolve within the repayment period. Depends on their loan term, it may be 2 to 5 years. I would say for certain oil and gas price will go back to normal by then. If not, then I can say it's not just Germany need to worry. It's the entire world, including China.

Don't worry about China. First, we can get 50% discount on energy. Second, China does not have high inflation. Third, even if China has high inflation in the future, we can export inflation to you through exports.

 

[jhungary]

Don't worry about China. First, we can get 50% discount on energy. Second, China does not have high inflation. Third, even if China has high inflation in the future, we can export inflation to you through exports.

What's that have to do with EVERYTHING I had said??

My point is, you can build 50 Aircraft Carrier, where do you dock it? Just because you have money does not make the coastline longer or able to support more ship at sea.....That's a PHYSICAL thing. Unless your reply is to reclamation of land and make the coastline bigger than the US. Dude, you would have to fill half the Pacific with sand to be able to do that....

And lol, you don't get 50% on energy, that's about 20-30% from Russia, if Russia give you 50% and selling $47 per barrel (Brent Crude is 91 USD per barrel) they would have gone broke in no time. And that cannot be sustained for a long term for Russia even if they send you 30% discount.

And don't forget, we can also export inflation back to you thru USD as world dominance currency. The problem is, would USD last longer or would the current energy crisis last longer?? You have to be stupid not to bet on USD.

 

[Yongpeng Sun-Tastaufen]

What's that have to do with EVERYTHING I had said??

My point is, you can build 50 Aircraft Carrier, where do you dock it? Just because you have money does not make the coastline longer or able to support more ship at sea.....That's a PHYSICAL thing. Unless your reply is to reclamation of land and make the coastline bigger than the US. Dude, you would have to fill half the Pacific with sand to be able to do that....

China has plenty enough coastline to host 10 carrier strike groups. The UK had lots of carriers in WW2 and none of them used foreign bases.

Category:World War II aircraft carriers of the United Kingdom - Wikipedia

en.wikipedia.org

 

[tower9]

Well, first of all, Germany has a very strong Credit Rating, borrowing 200 billion to cap energy price is actually nothing. They had borrowed more during COVID.

Second of all, it's quite clear that Germany is betting on the energy situation will resolve within the repayment period. Depends on their loan term, it may be 2 to 5 years. I would say for certain oil and gas price will go back to normal by then. If not, then I can say it's not just Germany need to worry. It's the entire world, including China.

Too little too late. Germanys industry won’t maintain its competitiveness.

 

[jhungary]

Too little too late. Germanys industry won’t maintain its competitiveness.

I would want to hear the parameter you used to make this conclusion.

 

[tower9]

I would want to hear the parameter you used to make this conclusion.

Overhead costs will soar dramatically and won’t be coming down for the next several years. That will completely tear into corporate profitability.

 

[jhungary]

Overhead costs will soar dramatically and won’t be coming down for the next several years. That will completely tear into corporate profitability.

How? The cost v efficiency is largely due to COVID, and only amplified with this war, while this war would remain an issue, if the economy bounces back to pre-COVID level (Which most economist predict it will happened between 1 and 2 quarter of 2023). I don't see how overhead cost will maintain that high and the cost effectiveness remained infantile.

Again, energy price will play a role, but over next "several years"? I don't think so, in fact, brent has already come back down to $90 a barrel. And it is going down trend at the moment. I would say the worse for energy price is more or less behind them.

So again, I want to see how you come up to that conclusion "Overhead costs will soar dramatically and won’t be coming down for the next several years"

 

[fitpOsitive]

No one provoked Russia.

Whole Nato did. They first said no more expansion in nato on the boarders of russia, but they did it. Again and again. And then nato tried to block Russia in black sea through Ukraine. Sanctions after sanctions. And here comes Russia.
Russia was the lifeline of europe and Europeans are busy cutting it.

 

[MH.Yang]

What's that have to do with EVERYTHING I had said??

You said that if the high energy price remained for two years, even China could not escape inflation.

I tell you that inflation will not affect China.

It's the entire world, including China.

 

[nahtanbob]

What's that have to do with EVERYTHING I had said??

My point is, you can build 50 Aircraft Carrier, where do you dock it? Just because you have money does not make the coastline longer or able to support more ship at sea.....That's a PHYSICAL thing. Unless your reply is to reclamation of land and make the coastline bigger than the US. Dude, you would have to fill half the Pacific with sand to be able to do that....

And lol, you don't get 50% on energy, that's about 20-30% from Russia, if Russia give you 50% and selling $47 per barrel (Brent Crude is 91 USD per barrel) they would have gone broke in no time. And that cannot be sustained for a long term for Russia even if they send you 30% discount.

And don't forget, we can also export inflation back to you thru USD as world dominance currency. The problem is, would USD last longer or would the current energy crisis last longer?? You have to be stupid not to bet on USD.

how long will Russia give China a discount ?

You said that if the high energy price remained for two years, even China could not escape inflation.

I tell you that inflation will not affect China.

yup china is on planet unicorn

 

[jhungary]

You said that if the high energy price remained for two years, even China could not escape inflation.

I tell you that inflation will not affect China.

Exactly how?

If the energy crisis did not subside in the next 2 years, then the problem is CLEARLY will not be Supply, rather it would be demand. You cannot ride high on supplies for extended period of time, it will contract the market as company goes bust when they cannot continuously afford the energy price. That would impact the demand of large market such as US and UK and EU, and that in turn would have less import from everywhere, because the demand of such item diminished. And now tell me how it does not impact China if this is the case??

Global recession is NOT GOOD FOR THE ENTIRE WORLD, CHINA INCLUDED. Unless you somehow claim China being an export driven economy can be spared for a negative growth world. That is going to be the case, just because you said it will not does mean so. In fact, looking at last year data, China ALREADY suffered from global downturn, its growth has been less than most of Asia, if that does not wake you up, then I don't know what will. But if you choose to remain in your dream land and think everything is going to be A-OK to China when the world gone to shit, I mean, you stay in your dream and don't pull me in, I don't want to hear your weird "Chinese Economic Principal" to explain to me how China will be spared.

 

[jhungary]

how long will Russia give China a discount ?


yup china is on planet unicorn

Well, people don't know how much discount Russia is offering the Chinese. But 50% like the man said is pretty insane. Not even Putin will do that......lol

Most people speculate the discount between 20-30%, if that is the case, this will stop being profitable for Russia once oil price hover around 75-80 USD. Because general consensus is oil take around 50-60 USD to extract per barrel.

As for how long, that's depends on multiple factors.

1.) How long until China fills their reserve. Because that is going to fill up, and when it is filled, no point keeps buying.

2.) How long until the Brent Oil price fall below $80, it's between 80-90 now, so this may take anywhere between 6 months to 1 year. Notice pre-COVID average is $69 per barrel on a 5 year term.

3.) Depends on whether or not Russia will break before China stop buying. Oil and Gas cannot sustain Russian economy, especially when they are selling it on a discount. Russia at its worse is a 1.2 trillion-dollar economy, oil and gas at most net them 450 bil before the war. Which mean at some point Russia is going to break because they are in the red. And when they are broke, they can't afford to keep that discount running. Plus there is a war going on, that drain them money probably faster than the entire economic sector combine. This is not going to be long.