7 October 2022
CAUSES
*Looks like a 4th and new driver of inflation:
-Debt
-Covid
-War, WW3
-OPEC+ supply-side production cuts > price increases
EFFECTS
NOW & SHORT TERM
Duralex, its Picardie model featured in the James Bond movie “Skyfall”, but it is putting its oven on standby for 5 months even though the company’s order book is full and sales are growing, causing quite a stir.
>Transfer of wealth from consuming to producing countries, Saudis switch sides
>Inflation & shortages: fertiliser, food, energy, resources
>Wage demands
>Subsidise households (this is unsustainable borrowing from future taxpayers), cap wholesale energy prices to industry
>more debt, windfall & corporation taxes up, voluntary Energy saving programs (govt, industry, public)
>Release reserve stocks
>Buy Russian oil via China & LNG from America
>Industry buckles as core 25% of economy hit - metals, ceramics, chemicals, paper...bakers!; move from gas to oil & coal; import not make; purchasing reductions; increased number of insolvencies and closures
>coercive Energy rationing programs, govt imposes price controls at home, but also govt price rises to dampen demand, govt backs employers with wage boards & employees take to the streets & strikes
>Rethink production processes for more efficiency and reduced CO2
>Alternative reserve currency for global south
LONGER TERM
>Social explosion-what form?
>Nuclear and renewables come online - energy independance, permanent energy price hikes
>But too late...Irreversible climate change
>America withdraws from Ukraine
>Repair & re-open pipelines
>WW3 ends
>New World Order
>Decline of Europe (America's only reliable ally?), production relocates to Asia & America
Europe suffers from a “structural disadvantage in energy costs” compared with the rest of the world because of the Ukraine war as well as a “structural lack of investment in energy over the past 25 years”.
0 comments:
Post a Comment
Keep it clean, keep it lean