Energy, prices exploded. Propaganda
Is the wave of war that ravages Ukraine the same one that skyrockets our bills? We depend for about the 40% of our gas needs from Moscow and therefore it is all Putin’s fault and the Russians if our bills exploded. This is what the various heads of state of the EU and the mainstream media with unified channels have been repeating for weeks: it is the war that is blowing up the price balance we had before with damage to citizens. Basically, the energy crisis and cost increases are blamed on the war in Ukraine and Russian belligerence. But just read the market indices of the Power Exchange to find out it’s a hoax. Prices have soared from June-July 2021 with an exponential growth since August 2021, far from the winds of war. The curve is clear: from mid-2021 it skyrockets until December 2021, then drops a little and rises again today with the war and sanctions against Russia (see the table at the end). In addition, it is precisely the Western measures, adopted by the US leading the Democrats to counter the Russians, that raise European costs.
Energy: for analysts what caused the price increase
The energy crisis is due, already explained in 2021 by many American sector analysis sites but also public policy research centers such as the Brookings Institution, for a combination of three factors.
“The crisis has three distinct elements”, write the Brookings scholars, “COVID-19 and disruption from the supply chainthe greater interconnection of natural gas markets and the volatility of energy prices during the energy transition from fossil fuels “
If the current war has exacerbated the situation, it was the pandemic that caused a historic drop in energy demand and prices. Now that we are emerging from the pandemic, the recovery has spiked the price. The market is not resilient and needs time to adjust to speculators who have an easy game in driving up prices. The green policies of the European Union and the US have done the rest, removing pieces of containment bearings, such as coal because it is a pollutant and diesel (which is used less in the US but a lot in Europe), contributing to the increases. It should be remembered how much the former Republican President Donald Trump said he was opposed to green strategies as we are adopting them.
“Energy markets are naturally inelastic to prices and therefore volatile,” Brookings explained in December 2021, “however, the recent emphasis on the environment and affordability during the first part of the energy transition may have led to less attention to energy security.
The new interconnection of energy markets between fuels and geographies has also changed the way to which the criss spreadthe. Measures such as strategic reserves and response to demand may need more attention, along with programs to help low-income consumers, who are always most affected when energy prices are high. Diversifying the energy supply with renewables will also help, since once built, these sources are not subject to the whims of global markets ”.
Translated. Natural gas prices have soared in Europe with the increase in demand globally, all in conjunction with the non-arrival of raw materials that had stopped, as an extraction / production activity, in relation to the lockdowns of the various countries . Now that we’re sharing prices are being pushed up, given the lack of regulation of the markets by the states. This scenario went hand in hand with the rapid growth of inflation (increase in prices or even a reduction in the purchasing power of money), driven by the reopening of post-pandemic economic activities, by the rise in energy prices and by the relationship with the earlier, the pandemic, in which inflation was very low. Waiting for renewables, in which no serious investment has ever been made, we are in canvas pants.
Energy, the diesel crisis
In addition, there is diesel (or diesel), which has been reducing stocks for years, given the green policies adopted that have made many car manufacturers choose to discontinue it, which has received a fatal blow with the existing framework, between war and sanctions against Russia. Much European productive economy, agriculture, fishing, mining, transport, depends on diesel. 50% of imported diesel is Russian. Fuel for diesel engines, in large part, must be purchased already refined because European industries have not adapted to the activity. The price can only rise, given the sanctions on Russia and the search for other sources of supply.
And there is an immediate problem. According to data from Airp, the Italian Association of Tire Retreaders, 96 out of 100 Italian trucks travel with diesel (96.3% for accuracy). The other European countries are not in such dissimilar conditions. So with a disproportionate increase in diesel costs, we risk stopping goods that will not arrive on the shelves or elsewhere. A disastrous event on the economies of the continent that would not, however, fall on the US that uses gasoline the most. Behind there are historical reasons linked to the energy crisis of the 1970s and the choice of Europeans to use more diesel than petrol.
Energy: how rulers respond to rising prices
In this context, what are our European rulers and the mainstream media doing? They repeat the propaganda: it’s all Putin’s fault and the war if prices increase, echoing the US strategies of Joe Biden and the Democrats who are proving unable to regulate inflation and contain the energy crisis but able to grow a part of the economy in the same old way, that of investing in US weapons. US President Joe Biden has announced the budget for fiscal year 2023: 5,800 billion dollars, of which 813 billion will go to defense spending. with a 4% increase over the current fiscal year.
Our European and Italian rulers know very well that with their choices, sanctions, the search for other sources, the lack of market regulation with a different relationship with energy suppliers, as well as having no impact on the war in Ukraine, they kill the European economies and the peoples who live on the continent. But by now the majority of politicians seem to serve only their own personal interests and not that of the peoples who elected them. And now the Democrats are in charge of the US, so better adapt to their strategies.
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