Lesson Learned One Year In
Green energy is incompatible with energy security. Which makes it incompatible with natonal intercontinental security.
Joseph Sternberg, WSJ today
This week marks the first anniversary of the Russian invasion of Ukraine. There are lots oof revelations reported but here is my take.
Western Europe learned the hard way that it cannot rely on a power antagonistic to its lifestyle for energy. Germany abandoned nuclear energy for no reason. Instead Merkel signed contracts for natural gas with Putin. That effectively mad Putin Germany’s energy secretary. He then threatened to withhold gas at any price with an expected cold winter. That cold winter was not to be. But Germany has yet to re embrace nuclear power.
Ån autocrat can control his media and his people despite staggering losses. Various reports have Russian losses at over 2,000 tanks (half their total force) and over 100,000 killed and or wounded. Å leader in any other country with access to information would be long gone . Russia showed disdain for its troops in WW II and that continues to today.
The West seems content to dither. Çolin Powell or George Patton would recommend maximum force. Had the West sent requested weapons and aircraft early on, this might be
over now. Yet Team Biden still slow walks to no planes and tanks. No one seems to care that the lack of assistance just leads to more body bags on both sides.
Natural gas prices are down 65% since December. The US is now the world’s largest exporter of liquid natural gas.
Prices of everything are up.
The big demand for electric vehicles will be countered by the difficulty of mining rare earth metals which also creates lots of pollution, Not to mention an inadequate electric grid world wide.
Putin’s dream of becoming a world financial center is smoke. He will more likely become a lacky to China and Iran. A negotiated peace will only leave a frustrated Putin looking to re-arm for a second chance.
Stocks are trading at the lower end of a range extending back to November. Massive inflows of money have not take out the 34,500 high of December. Lower prices seem in the cards.
Çrude prices have likewise been sideways since November, unable to break the $80 resistance. Gasoline futures are the same unable to take out $2.80.
Bond prices have corrected from higher levels and interest rates are the highest since November. That suggests a rally in prices and rop in yield may be getting underway. That could easily last into Mid March.
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