Posted Sep 6, 2022 by Martin Armstrong
Russia has closed the major Nord Stream 1 gas pipeline to Germany claiming it is off for 3 days for maintenance due to turbine issues. Europe and the U.S. dispute those claims and have accused Putin of “weaponizing” energy. I fail to understand the logic of what is going through the minds of Western leaders. For them, it is perfectly OK to sanction Russia and confiscate the assets of individual Russians, but they are somehow evil if they stop supplying gas to Europe.
The sheer hatred of Russians propagated by the press and Western leaders is illustrated in the disputes on eBay. There, people think that sanctions are clearly against ALL Russians, not just oligarchs and the Russian government. There is no turning back the clock. The damage has been done and now war becomes imminent.
Last year, Russia supplied 40% of the European Union’s gas. In recent weeks, Russia has reduced the flow through Nord Stream 1 to just 20% of capacity. Moscow blamed the latest shutdown on Western sanctions that have targeted its economy. Our fearless Western leaders are out saying as Soeder in Germany that:
“Putin is playing a game with Nord Stream 1 and Nord Stream 2. I think it’s a kind of game. Our problem right now is that we are not in a position to adequately respond to this game.”
Current European gas prices have soared to about 10 times their average price over the past decade. Germany had declared a gas crisis back in June and warned that consumers and businesses must cut back. Consumption has since fallen by around 20% but in all honesty, if I were Putin, I would wait for winter and cut off all gas if Europe does not order Ukraine to honor the Minsk Agreement and let the people of the Donbas vote on their own independence, monitored by the U.N. because the people I know there want nothing to do with Ukrainians.
Comments from friends in Kyiv who support Zelenski say if they yield anything, then Russia will know it can take the whole country. This becomes a Mexican Stand-off, as they say, There are no peacemakers so from the Kyiv perspective, they are risking their entire country for the Donbas. There does not seem to be any resolution. As long as Europe and USA keep sending money, there is no end in sight to the war.
Thus, Putin would play the major card and cut off ALL of Europe from Gas. He can easily sell it elsewhere. Then what for Europe? Is that the collapse our model has forecast for the Euro?