Posts

Posted on

Inflation has peeked… Its the massive deflation a panic FED has created

12-month headline inflation peaks at 9.1%, core slows further to 5.9%.

Headline inflation in the backward looking CPI has peak at 9.1%. The more important Core CPI inflation, in contrast, has peaked in March at 6.5% and has fallen further in June down to 5.9% in the current print. Funny what the forget to tell you. We expect the monthly pace of inflation to slow notably over the remainder of the year. July and August CPIs should see core inflation falling to under 5%. The market is also ignoring the biggest drop in M2 money supply i have ever seen.

The Fed has slammed on the breaks and they are in panic mode. If they raise rates 100 bases points later on this month this will keep the tradition alive of over stimulation and then panicking and over tightening. Au contraire Inflation is not the crises…. Its the massive deflation they are creating as they panic. And we do deflation…..

 

 

Posted on

Oil prices fall as recession woes accelerate….. US crude inventories up by 3.3 million barrels – EIA

P rices of oil futures fell on Thursday as recession fears continued to mount, prompted by the latest report on the United States inflation. The elevated figures could potentially lead to more aggressive rate hikes from the Federal Reserve, which would, in turn, affect the growth of the global economy and tamp down the demand for crude. West Texas Intermediate (WTI) for deliveries in August declined 1.42% to $95.14 per barrel at 4:31 am ET, while Brent for September settlements lost 0.95%, selling for $98.54 per barrel a minute later.

US crude inventories up by 3.3 million barrels – EIA

Commercial crude oil inventories in the United States, which are not taking into account those in the Strategic Petroleum Reserve, were up by 3.3 million to 427.1 million barrels in the week ending July 8, the Energy Information Administration (EIA) revealed in its report published on Wednesday. US crude oil refinery inputs averaged 16.6 million barrels per day, improving by 202,000 barrels per day from the average recorded the prior week. Refineries operated at 94.9% of their capacity, while gasoline production dropped, averaging 8.9 million barrels per day. Imports of crude oil in the US averaged 6.7 million barrels per day, falling by 0.2 million barrels per day compared to the previous week. Total commercial petroleum inventories increased by 21.7 million barrels. NN: As we previously reported crude oil and gasoline prices has peeked. Currently we are targeting crude oil in the Eighties.  Biden would not be going to Saudi to kiss princess ass unless he had a deal to get them to increase production…… And yes Dorthy inflation has peeked… And yes the Fed is about to over-tighten…. Like they always do.

Posted on

Fake June CPI Report “Leaked” market dropped hard then recovered

https://youtu.be/i5SDm4I7Jko

US bls Says “Leaked” 10.2% CPI Report Was Fake

US Department of Labor Says “Leaked” 10.2% CPI Report Was Fake. The US CPI report will be the main highlight tomorrow, and will also serve as what JPMorgan calls a “market clearing event.”  While the BBG median consensus expects +8.8% YoY vs. +8.6% in June, Goldman and JPM expect 8.88% and 8.7% respectively, with whisper numbers at, or above, 9.0% One bit of “good” news, according to Deutsche Bank, is that yesterday the NY Fed’s long-run consumer inflation expectations series showed a decent dip and helped encourage a big rally in bonds as the tug of war in the asset class continues. Of course, much of this early optimism was reversed by today’s fake CPI report “leak” which emerged around noon and signaled a 10.2% Y/Y CPI print, but was only noticed by traders and algos in the last hour of trading, sending stocks tumbling to session lows driven by a huge sell program in a very liquid market… So paranoid is the market, and so gullible about “bad news” tomorrow, that none other than the US government’s Bureau of Labor Statistics had to ease traders’ nerves, saying that the “leaked” report was indeed a forgery.

“We are aware of a fake version of the June 2022 Consumer Price Index news release that is being circulated online,” BLS spokesperson Cody Parkinson told Bloomberg said in an emailed statement.

Which of course is not to say that tomorrow’s CPI print won’t be 10.2%, although that would be especially cruel. As a reminder, a on Monday we showed why a case for a sharply higher 9% headline CPI print tomorrow is possible, but that most likely will also be the peak as numbers grind lower afterwards, at least until gasoline prices soar again.

In any case, back to the forgery, none other than JPMorgan trader Andrew Tyler wrote in his EOD note  that “several clients have pointed to a leaked CPI number that is circulating around social media. I have been told it is an ugly number with some suggesting that it will print above 10%. Other media sites now saying the early release is a fake.” With that in mind, Tyler says to keep an eye on the energy component as we have seen a material fall in gasoline prices that will not be fully incorporated into Headline CPI, something which the White House has repeatedly said in the past two days (if forgetting that the only reason energy prices have plunged is because of the coming Biden recession). In any case, below is a chart of gasoline with highlights for May and June price performance. Separately, Rates vol and Equity vol  have divergence recently “so beware that CPI could drive both higher.”

  • JPM chief economist Michael Feroli thinks CPI prints 1.1% MoM and 8.7% YoY but given the labor market data from last week, the Fed is locked in to 75bps for July. He sees Core CPI rising 0.45%, a softer number than recent prints.
  • Private Payrolls are now above February 2020 levels. JOLTS job openings fell MoM but there are approximately 1.9x job openings per each unemployed person, this compares to ~1.2x in Feb 2020.
  • The Nat’l Federation of Independent Business reports that ~50% of small businesses had job openings in June with 48% saying they hiked compensation (BBG).
  • Feroli updated his Fed forecast where he sees the Fed ending its hikes in December with a 3.25% – 3.50% range which means that the Fed would hike 75bps in July, 50bps in September, and then 25bps in both November and December with no further hikes in 2023.
  • Many conversations surround peak inflation following the publication of the below chart from our inflation Phoebe White (full note is here). Longer-term inflation expectations have essentially round-tripped the move following the beginning of the RU/UKR conflict.

And while JPMorgan is slightly on the dovish side of the 8.8% consensus, Goldman is on the other side, with the bank today publishing a note (available to pro subs), in which it says that it expects a 1.15% increase in headline CPI in June, slightly above consensus expectations for a 1.1% increase and corresponding to a year-over-year rate of 8.88% (not 8.87% or 8.89%). On the other hand, Goldman sees slightly easier core prints with a 0.50% increase in June core CPI, below consensus expectations for a 0.6% increase and corresponding to a 0.3pp decline in the year-over-year rate to 5.71%.

Goldman highlights four key component-level trends for the June report:

1. Shelter. The most important category to watch in Wednesday’s report is the large and persistent shelter component (as we predicted it would be last summer when the macro-tourists, perma-idiots and other central bankers were still saying inflation would be transitory), which accelerated unexpectedly to its fastest monthly pace since 1991 in May. Goldman expects sequentially slower shelter inflation in the June report (rent +0.57% and OER 0.50%), reflecting slowing gains in the alternative rent measures that make up our shelter tracker and an OER drag from imputed utilities.

2. Nondurable goods or the bullwhip effect. Following the product shortages of 2021, inventories have now substantially overshot their pre-pandemic levels at large retailers like Target and Walmart. Some companies have already said that they anticipate cutting prices in coming months in order to reduce inventory stocks to more normal levels, and Goldman expects to see a 1% drop in apparel prices in June.

3. Auto and parts. On the other side, expect further increases in auto prices (new +1.4%, used +1.1%, parts +1.5%) due to continued global supply disruptions, most notably the Ukraine-Russia war and Communist China lockdowns. US automakers have been more optimistic about raising production later this year, which should eventually lead to more moderate growth in new car prices.

4. Health care. The CPI’s health insurance component closely tracks annual changes in insurer profitability. Goldman forecasted the sharp acceleration seen this year last fall based on the insurer data, and expects this small category to continue to make an outsized contribution until new insurer data are incorporated in October, at which point it is likely to turn quite negative for the next year. Goldman forecasts a +0.49% (mom sa) increase in medical services prices this month.

Going forward, Goldman expects monthly core CPI inflation to remain strong in late summer, picking back up to 0.53% in September, before eventually falling to 0.30% by December 2022. Absent a major recession (or depression), the bank forecasts year-on-year core CPI inflation of 5.5% in December 2022, 2.4% in December 2023, and 2.6% in December 2024.  The forecast reflects a negative swing in health insurance prices and a larger slowdown in goods than in services inflation next year.

NN: To be clear here i am placing a big bet that a studied analysis of this report will show inflation on the headline number soared… But inside the report we will see inflation has peeked.

Posted on

Fed Official: Mixed Signals Mean We ‘Could Talk Ourselves Into a Recession’

Thomas Barkin, president of the Richmond Federal Reserve, says it’s hard to get a true read on the state of the U.S. economy because of conflicting signals. “The strength of consumption and the labor market might be saying ‘hold’ or even ‘raise rates,’” Barkin said at an economic outlook conference in Baltimore Tuesday. But “the softness of investment, inflation and the bond market might be saying ‘lower rates.’” The Federal Open Market Committee voted last week to lower the Fed’s key benchmark interest rate for the third time this year to a range between 1.5% and 1.75%. But it also made it clear that it does not expect another rate cut to occur this year unless there is material evidence showing the U.S. economy is deteriorating. Barkin participates in the Fed’s policy discussions, but he can’t vote on monetary policy. Uncertainties surrounding the trade war between the U.S. and China, which has been going on for 16 months now, are part of the reason for the recent cuts. Barkin is keeping a close eye on the effect lower interest rates have on fighting the side effects of the trade tiff.

“I don’t discount the idea that we could talk ourselves into a recession — particularly if the uncertainty begins to affect consumer confidence and spending,” he said.

Some sectors of the economy seem just fine, though. The monthly jobs report for October that came out Friday beat expectations with 128,000 jobs added, according to Labor Department data. This quelled some fears that a recent slump in manufacturing and business investment would leak into other areas of the economy. Barkin thinks a positive development in the U.S.-China trade war would be an even bigger boost to the economic expansion that is now over a decade long because it would “build business confidence, build consumer confidence and lead to increased investment, spending and hiring.” “American businesses are creative,” Barkin said. “Give them the rules—almost any set of rules — and they will make things happen.” NN: We are seeing violent swings in the stock market indices. On the biggest volume i have ever seen. World currencies (except for the Russian Ruble ) are collapsing against the dollar. GOLD the “inflation hedge” is down $400 dollars from its March peek. It’s settled business gold is NOT a hedge against inflation.  The yeild cureve is all pover the map and the Wall Street pudits are losing trillion of dollars in what is suppoe to be safe secure retierment savins that was entrusted to them. I am a season balls to the wall lottery ticket speculator is having a tough time. The secret i know is that inflation has peeked and the FED is about to over tighten. They have done it every time. Think back to 20% interest rate under Volcker. Oil is seeing huge drops down 30% off its recent high. Gasoline prices are seeing its fastest drop ever. Commodity prices from lumber to cooper to grains are plunging in price. If i am right and happen to GUESS lucky, understanding the hysteria in the market,  could be very very lucrative. Trading against the street (which i have done for a lifetime) is very dangerous  and IF we guess wrong (most likely scenario) we will take a wipe out

Posted on

US oil inventories up by 4.8M barrels….. OPEC keeps oil demand outlook unchanged at 3.4M bpd

Crude oil inventories in the United States rose by 4.762 million barrels in the week ending July 8, private data from the American Petroleum Institute (API) reportedly showed on Tuesday. The stocks of distillates gained 3.262 million barrels. On the other hand, the supply of gasoline increased by 2.927 million barrels.  West Texas Intermediate (WTI) for deliveries in August fell by 0.21% at 4:23 pm ET to sell for $95.71 per barrel. Two minutes later, Brent for inventories in September decreased by 0.34% to go for $99.27 per barrel. NN: The log jam has been broken…. $125 oil has become $95 oil. 

RIYADH: The Organization of the Petroleum Exporting Countries has forecast that world oil demand will rise further next year, but at a slightly slower rate than in 2022, with consumption supported by better containment of the COVID-19 pandemic and still-robust global economic growth. In a monthly report, the OPEC said it expects world oil demand to rise by 2.7 million barrels per day in 2023. This year’s growth forecast was left unchanged at 3.36 million bpd. Oil use has rebounded from the pandemic-induced slump in 2020 and is set to exceed 2019 levels this year even as prices hit record highs. However, high crude prices and Chinese coronavirus outbreaks have eaten into 2022 growth projections. “In 2023 expectations for healthy global economic growth amidst improvements in geopolitical developments, combined with expected improvements in the containment of COVID-19 in China, are expected to boost consumption of oil,” OPEC said in the report. OPEC said its 2023 forecasts assume there will be no escalation of the war in Ukraine and that risks such as rising inflation do not take a heavy toll on global economic growth. The group and its allies including Russia, known collectively as OPEC+, are ramping up output after record cuts put in place as the pandemic took hold in 2020. In recent months OPEC+ has been undershooting targeted production increases owing to underinvestment in oilfields by some OPEC members and by losses in Russian output. The report showed OPEC output bucked that trend in June, rising by 234,000 bpd to 28.72 million bpd.

Posted on

Gasoline Prices See The Largest Drop In Nearly 15 Years

While gasoline prices are still $1.50 higher per gallon than they were this time last year, they fell sharply overnight in what was the largest one-day drop in nearly 15 years, according to AAA data. The current price for a gallon of gasoline in the United States is averaging $4.721 on Friday, down from $4.752 per gallon on Thursday—a 3.1-cent drop. The weekly change is even more significant at 12.1 cents. According to Gas Buddy’s Patrick De Haan, more than 5,800 gas stations across the country are offering gasoline at $3.99 per gallon or less. While they are trending down this week, gasoline prices are still $1.58 higher than they were this time last year. Gasoline prices continued to drop as crude oil prices rose on Thursday and Friday, but crude oil prices are still down significantly week on week. Crude oil NY hit a high i June of $22.00 a barrel. Now trading at a little over $100.00 a barrel. After Biden as a begging goes to the Saudis, kisses royal ass and does the sword dance pries will come down even further. High gasoline prices have been a worry for the Biden Administration, which has so far released more than 145 million barrels of crude oil from the nation’s Strategic Petroleum Reserves, bringing the SPR down to levels not seen in decades in order to calm the high prices at the pump. Another measure that the Biden Administration has taken includes asking OPEC+ to pump more, but the group has been either unwilling or unable to live up to its production quotas. Also contributing to the price decrease in gasoline is U.S. gasoline demand, which is down roughly 4.5% from last week, according to De Haan. NN: nothing is more inflationary then rising energy prices. On the other hand noting is more deflationary then energy prices peeking and coming down. I have never seen a surge in oil that is not followed by a plunge,

Posted on

New, highly contagious Omicron variant raises concern for scientists as it spreads in India and beyond

The quickly changing coronavirus has spawned yet another super contagious omicron mutant that’s worrying scientists as it gains ground in India and pops up in numerous other countries, including the United States.

Scientists say the variant – called BA.2.75 – may be able to spread rapidly and get around immunity from vaccines and previous infection. It’s unclear whether it could cause more serious disease than other omicron variants, including the globally prominent BA.5.

“It’s still really early on for us to draw too many conclusions,” said Matthew Binnicker, director of clinical virology at the Mayo Clinic in Rochester, Minnesota. “But it does look like, especially in India, the rates of transmission are showing kind of that exponential increase.” Whether it will outcompete BA.5, he said, is yet to be determined. Still, the fact that it has already been detected in many parts of the world even with lower levels of viral surveillance “is an early indication it is spreading,” said Shishi Luo, head of infectious diseases for Helix, a company that supplies viral sequencing information to the U.S. Centers for Disease Control and Prevention. The latest mutant has been spotted in several distant states in India, and appears to be spreading faster than other variants there, said Lipi Thukral, a scientist at the Council of Scientific and Industrial Research-Institute of Genomics and Integrative Biology in New Delhi. It’s also been detected in about 10 other countries, including Australia, Germany, the United Kingdom and Canada. Two cases were recently identified on the West Coast of the U.S., and Helix identified a third U.S. case last week. Fueling experts’ concerns are a large number of mutations separating this new variant from omicron predecessors. Some of those mutations are in areas that relate to the spike protein and could allow the virus to bind onto cells more efficiently, Binnicker said. Another concern is that the genetic tweaks may make it easier for the virus to skirt past antibodies — protective proteins made by the body in response to a vaccine or infection from an earlier variant. But experts say vaccines and boosters are still the best defense against severe COVID-19. In the fall it’s likely the U.S. will see updated formulations of the vaccine being developed that target more recent omicron strains. “Some may say, ‘Well, vaccination and boosting hasn’t prevented people from getting infected.’ And, yes, that is true,” he said. “But what we have seen is that the rates of people ending up in the hospital and dying have significantly decreased. As more people have been vaccinated, boosted or naturally infected, we are starting to see the background levels of immunity worldwide creep up.” It may take several weeks to get a sense of whether the latest omicron mutant may affect the trajectory of the pandemic. Meanwhile Dr. Gagandeep Kang, who studies viruses at India’s Christian Medical College in Vellore, said the growing concern over the variant underlines the need for more sustained efforts to track and trace viruses that combine genetic efforts with real world information about who is getting sick and how badly. “It is important that surveillance isn’t a start-stop strategy,” she said. Luo said BA.2.75 is another reminder that the coronavirus is continually evolving – and spreading. “We would like to return to pre-pandemic life, but we still need to be careful,” she said. ” We need to accept that we’re now living with a higher level of risk than we used to.” NN: Unfortunately come October it will be proven the world let its guard down to soon. We should be getting a booster shot right now tailored to the two new variants.

Posted on

WH: CPI data expected to be ‘highly elevated’

The White House expects June’s consumer price index figures to be “highly elevated” as Americans grappled with substantial increases in the cost of gasoline and food, but said the reading was “already out of date” because of falling energy prices. “Gas and food prices continued to be heavily impacted by the war in Ukraine,” press secretary Karine Jean-Pierre said Monday, adding that the report — to be released Wednesday — was “backwards-looking.” Economists surveyed by Bloomberg expect the report to show consumer prices rose 8.8% in June from a year earlier, which would be a fresh 40-year high following an 8.6% reading in May. But Jean-Pierre downplayed the headline number, pointing out that prices at the pump had fallen since the reading. “June CPI data is already out of date because energy prices have come down substantially this month and are expected to fall further,” she said. June risks being the third month in the past four to see CPI increase at least 1% compared to the previous month. Rising inflation may prompt the Federal Reserve to raise its benchmark rate 75 basis points for a second consecutive meeting on July 27, and has fueled fears of a possible recession despite strong jobs data that shows unemployment near a five-decade low. NN: Tomorrows CPI report will represent peek inflation. Its a lagging report reflecting early June data. From food to energy to minerals prices are dropping. The markets should understand this. But who knows what the knee jerk reaction will be. The great danger now is the fed overtightens,

Posted on

Nord Stream halts gas to Europe as servicing begins

LONDON/FRANKFURT (Reuters) – The biggest single pipeline carrying Russian gas to Germany started annual maintenance today, with flows expected to stop for ten days, but governments, markets and companies are worried the shut-down might be extended due to war in Ukraine. The Nord Stream 1 pipeline transports 55 billion cubic metres (bcm) a year of gas from Russia to Germany under the Baltic Sea. It will undergo maintenance from July 11 to 21. Last month, Russia cut flows to 40% of the pipeline’s total capacity, citing the delayed return of equipment being serviced by Germany’s Siemens Energy, in Canada. Canada said at the weekend it would return a repaired turbine, but it also said it would expand sanctions against Russia’s energy sector. Europe fears Russia may extend the scheduled maintenance to restrict European gas supply further, throwing plans to fill storage for winter into disarray and heightening a gas crisis that has prompted emergency measures from governments and painfully high bills for consumers. German economy minister Robert Habeck has said the country should confront the possibility that Russia will suspend gas flows through Nord Stream 1 beyond the scheduled maintenance period. “Based on the pattern we’ve seen, it would not be very surprising now if some small, technical detail is found and then they could say ‘now we can’t turn it on any more’,” he said at an event at the end of June. Kremlin spokesperson Dmitry Peskov dismissed claims that Russia was using oil and gas to exert political pressure, saying the maintenance shutdown was a regular, scheduled event, and that no one was “inventing” any repairs. There are other big pipelines from Russia to Europe but flows have been gradually declining, especially after Ukraine halted one gas transit route in May, blaming interference by occupying Russian forces. Russia has cut off gas supplies completely to several European countries that did not comply with its demand for payment in roubles. “The last few months have shown one thing: Putin knows no taboos. A complete halt to gas supplies through the Nord Stream pipeline cannot therefore be ruled out,” Timm Kehler, managing director of German industry association Zukunft Gas, said. Germany at the weekend welcomed Canada’s decision to issue a “time-limited and revocable permit” to allow equipment to be returned for the Nord Stream 1 pipeline. But Ukraine’s energy and foreign ministries said in a statement they were “deeply disappointed” and urged Canada to reverse a decision they said amounted to adjusting the sanctions imposed on Moscow “to the whims of Russia”. Siemens Energy said it was working on further formal approvals and logistics to get the equipment in place as soon as possible. Zongqiang Luo, gas analyst at consultancy Rystad Energy, said it was “not impossible” Gazprom could use any delay as a justification to extend the maintenance period. In previous years, the annual maintenance period on Nord Stream 1 has lasted around 10-12 days and has finished on time. It is not uncommon for additional faults to be detected during routine maintenance at pipelines or gas infrastructure and operators can prolong outages if necessary. While a complete halt of gas is considered unlikely, Gazprom has not been re-routing flows via other pipelines, meaning a prolonged reduced flow rate is probable, analysts at Goldman Sachs said. Germany has moved to stage two of a three-tier emergency gas plan, which is one step before the government rations fuel consumption. It has also warned of recession if Russian gas flows are halted. The blow to the economy could be 193 billion euros ($195 billion) in the second half of this year, data from the vbw industry association of the state of Bavaria showed last month. “The abrupt end of Russian gas imports would also have a significant impact on the workforce in Germany…around 5.6 million jobs would be affected by the consequences,” vwb’s managing director Bertram Brossardt said. The effects would be wider still. A complete halt would keep European gas prices, which have already stung industry and households, higher for longer. Wholesale Dutch gas prices, the European benchmark, have risen more than 400% since last July. “If Nord Stream gets cut off, or if Germany loses all its Russian imports, then the effect will be felt on the whole of north-western Europe,” Dutch energy minister Rob Jetten said. In an interview with Reuters on Thursday, he said the Dutch Groningen gas field could still be called upon the help neighbouring countries in the event of a complete cut off in Russian supplies, but ramping up production would risk causing earthquakes. Meanwhile, a halt of supply through Nord Stream 1 would hurt Russia as well as western Europe because it would lose revenues. Russia’s finance ministry said it in June expected to receive 393 billion roubles ($6.4 billion) in extra oil and gas revenues compared with the amount expected in its budget planning. For July, it expects 259 billion roubles above its budget plan. Extended maintenance could also result in more Russian gas production shut-ins, relative to the 9% year-to-date year-on-year decline in Gazprom production reported so far, Goldman Sachs said. NN: Energy makes the world go around. Its the heart of modern society. At one time it was wheat, wine and olive oil. And he who controls energy controls the world. You would think “leadership” would seek to have energy security. Ensuring they have domestic energy sources. Certainly not getting the critical supply of energy from their enemies….. It is the height of insanity the the US, Europe and England that have vast energy resources would shut down domestic energy supplies and rely upon Russia, Libya, Iran and Venizwella for their energy needs.

Posted on

Europe’s Renewable Energy Mistake will throw the content into poverty and turmoil

  • Europe failed to prioritize energy security and has now found itself overly reliant on Russian energy and paying sky-high prices for power
  • France is dealing with this issue by renationalizing its largest utility in order to ensure the survival of nuclear power.
  • Germany, which is arguably the country that has suffered most from energy security failures, may soon have to bail out its largest utilities.

France plans to renationalize EDF, its giant utility. That doesn’t sound like a big deal because the government already owns 84% of EDF’s outstanding shares. But here is how we read the story. The French government wants to expand nuclear production in France and it also wants EDF to spend big money on the rehabilitation of numerous nuclear power generating stations. It has put pressure on EDF to embrace those policies and we suspect that it could force the issue as the majority shareholder. But a board of directors, with a fiduciary responsibility to shareholders and other providers of capital, would have a hard time approving a strategy that looked too risky or economically uncompetitive. EDF is, after all, not a division of the ministry of defense, but rather a somewhat privatized company with the government as its biggest and controlling shareholder. At least that is the appearance it would want to give to its shareholders. If France requires more nuclear power for geopolitical or strategic reasons, despite its seeming cost disadvantage in the marketplace, we have no quarrel with that decision. Our issue is with the current policy—to require some non-governmental shareholders to bear national security burdens and take financial risks that really belong uniquely to the government. The French have approached the matter with admirable clarity.  Germany, taking the almost opposite path, rejected nuclear power in its future after the Fukushima accident, and as a result, became energy dependent on Russian gas instead. One risk was traded for another but not spelled out. A month ago Germany took control of Gazprom Germania, a vital piece of natural gas infrastructure. Now the country faces another problem, the rocketing cost of natural gas that results from the Ukraine war. Germany may have to bail out Uniper, one of Germany’s largest utilities, and even worse, allow utilities to pass on the higher fuel costs to consumers.  We would be curious to see an analysis of the cumulative savings that Germany amassed as a result of contracting for a “cheap” supply of Russian gas as opposed to the astronomical costs of the present situation.   As an aside, the oil majors plan to sign long term LNG contracts beginning in 2026 (not much help now) with Qatar, the putative Saudi Arabia of LNG.  Presumably much of this new gas would replace Gazprom supplies to Europe. Diversification of supply reduces risk. But is dependence on Qatar necessarily a low risk decision? Dependence on Russian natural gas was once considered a low risk decision too.  Our point, simply, is that energy infrastructure and supply is a vital component of national security. Ignoring the security aspects of energy policy in order to save money can turn into a big and expensive mistake.  NN: the lefty greenweenieees overplayed their hand. The masses are not going back to the 1800’s to satisfy their renewable agenda. IT IS NOT GOING TO HAPPEN. The coal plants will be fired up, nukes switched back on and natural gas and oil will be the fuel until the technology catches up with the hype. The problem is it will take 5 years to correct this travesty. Their is a price to be paid for stupid.