It goes without saying that Germany’s energy move has swept away the hypocritical and dreary pro-European rhetoric once and for all. The situation literally explodes. And Berlin understood that much earlier than others. Because, gentlemen, paradoxically, the decision to reactivate the guarantee fund set up to combat the pandemic and to provide it with funds of up to a maximum of 200 billion euros was not the most sensational news that came out of Germany recently. But here, in the meantime, Mario Draghi found nothing better and more urgent to do than to call Volodymir Zelenskyy for the umpteenth time to assure him that Rome will not recognize the result of the referendum on the annexation of Russia. Vladimir Putin must have slept the same way the other night. On the other hand, the bills, already celebrating +59% in the last two months of the year, seem destined to keep growing. Of healthy and robust constitution.
And do you know why Germany is so quickly breaking away from the European train, of which it has been the locomotive for decades? ‘Cause we’re on a siding in full swing And the crash is just around the corner. But not only. Another argument that the Italian media hastily degraded to an almost colored pen and apparently immediately took up the accusatory thesis against Moscow is the accident at Nord Stream. In Germany, of course, the topic continues to enjoy the greatest attention. And lively restlessness. Because the latest findings, which the Spiegel reported with great fanfare, speak of a detonation that is comparable in strength to that of 500 kilograms of TNT. You read that right. And the German security forces announced that the incident clearly resulted from the explosion of a very high-explosive bomb. But there is a frightening sentence: only one state actor behind the action. Translated, only a subject attributable to fragments or apparatuses of a state can be responsible for the incident.
Well, connect the dots: This clear and substantial break in the European energy solidarity front – actually only available on paper, but so far used as a club for the sanctions regime against Moscow – does not sound like silence either, but at the same time a very loud mass for you, in the discussion of the prêt-à-porter vulgata not only in relation to Russian responsibility in the attack, but the entire war rhetoric? If that were the case, the Scholz government’s decision to protect families and businesses as much as possible with a guarantee fund could take on even more troubling connotations: the perception of an impending collapse in the entire war and geopolitical conflict.
And be careful, because until October 16, China will avoid any overexposure. After that date, when the Chinese Communist Party Congress is held and Xi Jinping can claim a lifetime position, everything could change. Starting with the Taiwan agenda. And the United States may seek to further destabilize the picture by threatening sanctions on Chinese assets after announcing a new package targeting Iranian oil exports. At that point the markets would turn into real stormy seas.
This chart is enough to understand the context in which the world moves: Since November 2021, global stocks have burned about $30 trillion in capitalization. But that’s not enough. Look at the span of exponential growth to record highs of this insane market cap: the March 2020 lows.
That is, the explosion of Covid as a pandemic. And the simultaneous activation of contingency programs by virtually every central bank in the world to support economies and citizens. Money that the narrative would love to print out of thin air to support businesses and families, but which magically poured into stocks like a criminal milk can: skyrocketing stock gains, while the crumbs served as doping income for a while, but with no pay Increases that have made everything sustainable. Even only in the medium term.
Obviously, such manipulation can only end on the bladder. Which, if it had erupted in a disorderly manner, would have produced an nth degree effect in 2008, given the current public and private leverage compared to that of fifteen years ago. Then what to do? A war suddenly breaks out. sanctions begin. And the backup engine will be reactivated. Geared, controlled bubble explosion. I am excited for the next.
Try to put it all in perspective: as a citizen and a user of the media circus, have you noticed a $30 trillion loss in market cap in global equities in less than a year? Obviously not. And do you know why? The much-discussed Lehman crisis has resulted in a total loss of 8 trillion in global equity capital. Today, in less than a year, we’re more than triple that. And all this guaranteed by cyclical crises, first Covid, and then Ukraine. Do you really think it all happened with no direction, no timing, and no precise plan to maintain the financial status quo to the total detriment of general well-being? Do you really still believe in the good versus evil, democracy versus autocracy, good versus evil narrative?
It’s just interest, it’s just profit, it’s just money. It is the wonderful liberal model that we in Ukraine are defending, committing suicide at the level of macro and geopolitical interests, foolishly believing that in doing so we are supporting democracy and freedom. In Germany, you might have understood that. No wonder the progressive and enlightened Scholz government literally went insane within 24 hours. Typical reaction of those struggling to survive. We, on the other hand, have a direct hotline between Palazzo Chigi and Kyiv. And we brag about it.
Be careful because if a price cap without Eurobonds is created to close the gap between quiet valuations and the spot market valuations, it is up to Rome to make the difference. So either budget deviation or end of bluffing and admission of empty boxes. At this point, a cap serves our spread. Because in one case or another, the king of the best will be naked.
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