The following is a direct excerpt from Marty’s Bent Issue #1258, which states that “The energy crisis is going to switch the money printers back on faster than most expect.” If you are interested in receiving Marty’s Bent, you can sign up for the newsletter on this page.
In spite of the fact that this disaster was entirely foreseeable, the rapidity with which the
energy crisis in Europe
is playing out appears to be catching the markets by surprise. Everyone is bracing themselves for a harsh winter with skyrocketing prices, but it appears that the majority of them were under the impression that these issues wouldn’t become apparent until the colder months. This style of thinking is proving to be a monumental mistake as the compounding effects of ever declining supply and markets attempting to front run the pandemonium are leading to price levels that are making it hard for markets to simply function as intended.
The news broke this morning that European trading desks are facing at least $1.5 TRILLION in margin calls because prices have run away from the available liquidity across the European energy industry. The news came as a result of prices running away from their historical averages. I am aware that we live in an age in which billions are thrown around like confetti at the Super Bowl, but to put that into perspective, that would represent around thirteen percent of gold’s overall market size and thirty-one and a half times the market cap of bitcoin at the moment. All of this is done simply to guarantee that the energy trading markets have adequate liquidity today. This doesn’t even begin to account for the amount of liquid assets that will be required as the year goes on because we’re not even close to that point now. The liquidity situation is going to shortly reach a point where the European Central Bank will be compelled to act, and they will be forced to turn on the money printer in order to bail out the energy industry. This could happen at any moment in the near future. It’s possible that this will be a turning point on the path toward Weimar 2.0 on a worldwide scale. Moreover, this is solely the case in Europe. If you look a little further west toward the United Kingdom, you’ll see that they are also beginning a very similar path, except they are beginning with the economic side of the equation.
Price limits on energy are one of the first important moves made by Liz Truss, the new Prime Minister of the United Kingdom, who was chosen by the World Economic Forum. Prepared to disburse as much as 170 BILLION pounds, which is more than 5% of England’s GDP, in an effort to ease the suffering that British citizens experience at the end of each month when it comes time to pay their electric bills. To the uninitiated, this might look like a perfectly reasonable plan. The newly elected Prime Minister is here to protect the financial well-being of the typical British citizen while also taking a stand against the “greedy” electrical and energy tycoons. However, if you have even a passing familiarity with economics and history, you should see that any attempt to fix prices in this manner is only going to make the situation worse. There is an inability to effectively supply fuels to the market, which is causing prices to rise, and as a downstream effect of this, it is getting tougher to supply power at costs that are affordable.
To try to fix prices by subsidizing costs for consumers, as is the case in the UK, or to inevitably print money to bailout energy producers, as may turn out to be the case in the EU, these actions will only serve to worsen the ability for these producers to deliver their goods to market, despite the fact that it may seem like the right move to make politically. In the UK, this is the case. In the EU, this may turn out to be the case. Price restrictions will eventually fail like a dam, and the printing of money will eventually lead to even more printing of money. Both of these acts will certainly result in higher rates of inflation as well as more human suffering. Even worse, the acts could lead their economies to a point where there is not enough money to allow producers to acquire the fuel that is necessary for utility companies to manufacture and transport energy. This would be an extremely negative consequence. It would appear that we are maybe going through the preliminary stages of this process given the liquidity issue that has been plaguing European energy companies.
This is what takes place when the foundation of the global economy is a monetary system that is totally divorced from the world in which we live, and when markets have not had the ability to appropriately price products and services for the better part of the last half a century. To make matters even more difficult, we have found that easy money may be used as a weapon in two different ways: first, by debasing the savings of the individual, and then, by selecting who can use that debased money and who cannot use that debased money. Even blocking off entire countries from communication. When entire nations are cut off from the monetary system, particularly when those nations are reasonably powerful, they will retaliate by arming themselves with their natural resources. We are currently witnessing this scenario play out as Russia has made the decision that they will simply refuse to sell their oil and natural gas to the western world if the western world does not wish to allow them access to their monetary and payment networks.
You crazy people, the situation is only growing worse with each passing day. The Western world has boxed itself in, and the only way out that appears to exist is a hyperinflationary collapse that compels people to pull their heads out of their asses and acknowledge that the unproductive class in command is bringing about our downfall. There is nothing that illustrates this point more clearly than the fact that we in the United States of America appear to be forced to follow the playbook of Europe by pushing forward with energy and monetary policy that is completely and utterly absurd.
And those of you who believe the United States is largely immune to the disaster that is happening in Europe should also pull your heads out of the sand and assess the situation more accurately. Because of the nature of our hyperconnected, high-velocity, trash economy and the level of credit exposure that exists in that region, our wagon is very well hitched to the outcome of the economic situation in Europe. The failure of energy and electricity companies to make ends meet as a result of skyrocketing costs will trigger a domino effect that will arrive on our shores far sooner than most people anticipate.
The only way to get out of this situation is to adopt a form of currency that is very difficult for the class of people who are not productive to corrupt. Bitcoin is the name of that currency. Once bitcoin is established as the world’s reserve currency, genuine pricing will be introduced to the markets. This will make it possible for capital to be allocated effectively, which is important because the costs of improperly allocating such limited resources will be incredibly high. If you attempt to virtue signal your way through the process of allocating capital, you will face repercussions that are unsustainable. Things are only going to grow worse until people in Europe, the United Kingdom, and eventually the United States wake up to the economic reality that they are facing. This is unfortunate for the people who reside in these countries.