fin du monde effondrement civilisation industrielle

“A deep recession and deindustrialization for Europe according to Forbes! » Editorial by Charles SANNAT – Insolentiae

My dear impertinents, dear impertinents,

It is a very long article which comes to us from across the Atlantic and from the United States and which Forbes magazine has translated for its French edition.

For the major American economic magazine, Europe is heading towards a “deep recession” and deindustrialization and they are not going there by the back of the teaspoon.

If I am talking about this article today it is because it is necessary to clearly understand what it means for Europe and the euro zone, for our countries and France in particular, the consequences of the war in Ukraine, the consequences of the rhetoric of the “with us or for Putin” type.

Here’s how the Forbes article begins.

“With natural gas prices more than $100 per megawatt-hour higher than they were a year ago, Western European economies are heading into the Middle Ages.”

And yes, it makes sense, the modern economy is abundant and inexpensive energy transformed into widgets and other services. No energy? No modern economy. Without energy, it’s not the Middle Ages, it’s to be more realistic the beginnings of the industrial revolution and at best the steam engine, but without coal, it will still be complicated!

Then they go on to tell you that he “This is no longer a short-term crisis. Stories from Western Europe are similar to those once heard in countries like Bolivia. High inflation and state-imposed resource rations”.

So that’s something to cheer you up. Rationing and inflation.

It’s obvious.

Europe in recession…

When the States create the conditions for the lack of everything, they are only good at managing the shortages and spreading out the lacks. So these are the recession forecasts for Europe that our American “friends” can make. Bruno, the Mayor, explains to you that he is revising the growth forecasts in France upwards, hahahahahahahahaha! Unpayable our Bruno. But he is right. With 10% inflation and more spending on energy, it is the GDP that will rise!!! Anyway, Bruno thinks it’s the tail wagging the dog and not the dog wagging its tail. In short.

“We now expect a deeper protracted recession and more persistent high inflation due to the impact of higher energy prices, a more decisive tightening cycle by the European Central Bank and demand… weaker”, indicate the economists of Barclays Capital led by Silvia Ardagna.

The recession in Europe: How big will it be?

Barclays predicts a recession in the euro zone in the fourth quarter that will persist until the second quarter of 2023, with a contraction of 1.7% in real GDP.

Some countries will be worse off than others.

Barclays has revised down the growth rates of France (2023: -1.2%), Spain (-1.6%), Italy (-2.1%) and Germany (-2.3%). Germany will be the worst due to its heavy dependence on Russian gas and bottlenecks in gas transportation in Europe. Most gas pipelines come from Russia.

Upcoming popular uprisings?

That’s what Americans think. For them, change will come from popular pressure asking for “pardon” and an end to the nonsense.

“Eventually, the European business class and the general population will pressure leaders to change course. If this pressure is accompanied by more announcements of layoffs and plant closures (imagine BMW shutting down its electric vehicle assembly lines because charging a car is too expensive, as are materials energy-intensive materials needed to make it – like steel), then now is probably the time to announce that this crisis is bottoming out.

Natural gas prices in Europe are falling for several reasons, including because commodity investors pulled out after a huge price spike. This is good news for Europe.

The protests are just beginning. So are the layoffs and closures of well-paying jobs. Those prices are going to have to come down even more.

Barclays forecasts a U-shaped recovery for the second half of next year. This means that the FTSE Europe could anticipate it around March.”.

Conclusion of Forbes?

A recession and a strong deindustrialization of Europe and Germany in particular for Ukraine. As a result, European equities should fall and only recover from March 2023… at best.

It is already too late, but all is not lost.

Prepare yourselves !

Charles SANNAT

“Insolentiae” means “impertinence” in Latin
To write to me charles@insolentiae.com
To write to my wife helene@insolentiae.com

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