Geopolitical Compass #12

Fiat denialists. Reckless UK establishment. Germany proves Harry Browne accurate.

Notable events in geopolitics and capital markets this week. Expand your perspective, gain context, and discover actionable insights.

Fiat Currency

“If these lifeboats weren't here, the passengers would be forced to negotiate with the captain a solution for the sinking ship.”

It begins. Bitcoin will be increasingly attacked as an excuse for the failure of the fiat system.

Germany

Government incompetence at its finest. Germany is proving to be the epitome of one of my favourite Harry Browne quotes:

“The government is good at one thing. It knows how to break your legs, and then hand you a crutch and say, 'See if it weren't for the government, you wouldn't be able to walk.”

Germany’s ‘green revolution’ and it’s highest cost electricity in Europe is just that.

Under a long-awaited and highly contentious proposal published by Green economy minister Robert Habeck, a large part of German industry would be offered electricity at a subsidised price of €0.06 per kilowatt hour (kWh) until 2030. The plan, which would cost an estimated €25-30bn, is aimed at bolstering German manufacturers in sectors such as chemicals, steel, metal and glass, as well as encouraging European investment in industries seen as crucial to reducing EU dependence on China, such as the production of solar panels and semiconductors.

But when 2030 comes, you’re on your own. So spend billions developing industry for an uncertain energy cost future. Any takers?

Let’s not forget, we also have to play favourites:

The economy ministry’s plan says that, in the long term, industry should be guaranteed cheap electricity produced from renewable sources through fixed-term contracts. The proposed subsidised price of €0.06 per kWh would only be available to certain industries, and would be capped at 80 per cent of a business’s consumption in a bid to incentivise energy saving.

Prices

So because cheap consumer crap (and manipulation of government statistics) drops in price, they want you to ignore the prices rising in what is actually critical in life.

Russia

Se my separate piece on Russia released yesterday.

As further evidence the world ex-Insane West is ready to move on, more international flights are re-opening to Russia. Last week Georgia, this week Indonesia.

Ukraine

It seems increasingly likely these Wstern munitions destroyed by Russian missiles last week in Ukraine included the depleted uranium rounds sent by the United Kingdom.

Russia warned the UK not to send depleted uranium to Ukraine, but the belligerent Brits pressed ahead and here we are less than two months later with potentially contaminated ground in the west of Ukraine.

At what point do tax payers in the UK and US grow weary of seeing hundreds of millions dollars go up in flames shortly after entering Ukraine and the Russian locate these weapons caches?

But just when you think the Brits can’t get any more reckless, they are now sending long range missiles to Ukraine. Why exactly do you need long range missiles to help in the trench warfare currently being conducted for every metre of ground? Or for the push into formerly Ukrainian regions now right on the battle front?

The answer is you don’t. These missiles are designed to launch attacks deep into Russian territory, to further escalate what is already a powder keg situation. The British establishment with these actions is actively inviting escalation of this conflict into WWIII.

Just a Little Bit of History Repeating

United Kingdom

The largest oil and gas producer in the North Sea saw it’s profits plunge thanks to the windfall taxes introduced by the UK government. Higher tax revenue, a win for UK citizens right? As always, government intervention to ‘fix things’ has consequences.

Harbour Energy says the tax saw its profits drop from £2.1 billion to £7 million last year. The firm added that, as a result, it did not bid for new projects in the North Sea and was continuing to downsize its UK operations.

The company is cutting 350 jobs at it’s Abderdeen base and is re-deploying future capital expenditure outside the UK.

✅ Less jobs in the UK.

✅ Less production of oil and gas for UK consumers which leads to higher energy prices.

Not exactly ‘softening the impact of cost of living crisis’ is it?

Watch What They Do

Emperor Palpetine George Soros is selling out of electric car companies. Could it be that he knows when real hardship hits the people - as governments are currently rolling out - renewable dreams go out the window? Maybe it’s because he knows we can’t produce enough raw materials to keep up production? Or perhaps he understands electricity grids and infrastructure can’t handle the additional demand without massive capital spending from already bankrupt governments?

Meanwhile Warren Buffett is selling out of TSMC, not surprising considering the seemingly uncontrollable urge of the US to provoke China into conflict over Taiwan.

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