But, I decided to link to the bloomberg article since it gives a better context.
To my non-expert intuition, it seems a double-edge. Currency devaluation brings the cost of European manufactured G&S cheaper and brings a boost to the economy, and hurts US exports. On the other hand, Bloomberg cites devaluation of Euro would bring more investments in the US as it is now a parity.
I'm pretty sure it was in January 2000. A few days before the 20th. Because the 20th was my grandfathers birthday and I visited him that day, but bought a Wallstreet Journal (Or Financial Times International Edition) with the headline that the euro plunged below parity for the first time at an airport either in Orlando or at the layover in Washington.
I may still have this issue in my memorandum box. But no, I won't go looking for it. ;)
As a non-economist, that's one of the basic things about trade that was surprisingly hard to wrap my head around. Your currency is high, that's good because you now have much greater buying power outside your country! Everyone else's stuff is cheap! Also, it's bad, because it means your stuff is more expensive, so nobody outside wants to buy it, so your exports decline.
Basically it's just: high currency is good if you're importing, bad if you're exporting.
Keep in mind forex prices are all gambling anyway.
These prices are the opinion of a relatively small number of people, some of whom - like certain well known banks - have a long record of bad faith price fixing.
> In terms of trading volume, it is by far the largest market in the world, followed by the credit market.
Furthermore:
> Trades between foreign exchange dealers can be very large, involving hundreds of millions of dollars. Because of the sovereignty issue when involving two currencies, Forex has little (if any) supervisory entity regulating its actions.
Total nonsense. Forex markets are extremely liquid; narrow and deep. Right now, I could exchange 3M USD for euros (or vice versa) and not even move the price by $0.0001.
OTOH, intuitively, as EU G&S get's cheaper, the market demand for EU G&S spikes, driving the prices up to a different equilibrium than before. It exasperates shortages in EU with secondary/tertiary supply chain effects slogging down the economy.
One anecdotal example is Czech based JetBrains. They announced a few days ago that they're increasing subscription prices. I presume, they have a huge sales numbers in the US.
I really don't understand macro-econ on this scale, Bloomberg article is good, but would be fascinating to read deep analysis of pros and cons.
That’s true and it does become harder to purchase US goods, but the US isn’t exactly the country you try to import from for cheap goods. Much of the appeal in US goods is either in brand or perceived quality.
The article is actually talking about public debt, which is different from “investment” in the FDI sense, but is still “investment” from the investor's PoV.
I have a colleague who likes to say that “every concept expressed with less than three words is adding confusion instead of reducing it”, and I like this saying more and more every day.
What you're describing is the “long term” possible outcome, but in the meantime, plummeting Euro is a major reason for high inflation in the EU. This is the most concerning “second edge”.
You’re right. Europe sold out a chunk of its high profile technology industry and never bothered to invest afterwards. Philips was the worst. They bought up every single electronic component supplier then sold it all to China. And let’s not look at the whole Nokia and Microsoft shit show.
The electronic design industry shrank so quickly that it actually pushed people out into other sectors.
We’re just pouring fuel on the race to the bottom. Lots of old men got to die rich.
Edit: don’t know why parent post was flagged. It was spot on.
Deepmind is a British company (now owned by Google), and are for sure at the forefront of AI from anything I can understand.
Covid vaccines were almost all done by European companies.
Europe is different for sure, and incumbents often use regulations to fight innovation but that happens in the US as well. Internet access for example is a lot better in Europe compared to US.
Hungarian? I assume you mean Czech (xvideos)? And xnxx (not sure if they're related). There's also a Cyprus based site (xhamster) although I suspect they have substantial operations in not-Cyprus.
Agreed. I lived in Germany until last year and it wasn't great. Especially since companies there often do only 2-year contracts, or only have higher speeds for the 2-year contracts.
Europe has a lot of braindrain as well. If you are truly talented, why would you stay (many don't)? Either you're not that good, or something else is tethering you here (many valid reasons).
You get decent healthcare that won't bankrupt you even if you're comfortable. And you're a few orders of magnitude less likely to get shot by some rando.
Also longer vacations and a more relaxed working environment.
I know of far more people heading to the EU from the US than the other direction.
> If you have a top tech job in the US you good have insurance.
Relative to health care in the EU, not that good. Top-tier platinum PPO from top silicon valley employers is still going to cost a lot out of pocket (way above the so-called max out of pocket) if you have health expenses and that's on top of the $25K-$30K we're paying for the coverage itself.
Why would it cost more than the “so called max out of pocket”?
A top tier platinum plan will, per the legal definition of platinum, pay for 90% of expected health expenses.
Max out of pocket should be less than $5k for a family of 4 on a platinum plan, and the employer will be paying 70%+ of the premiums, if not more.
Assuming you are seeing in network providers, which for a top tier platinum PPO should be almost all doctors, and a BCBS plan would be nationwide, then your premiums would be say $500 per month for a family of four, and out of pocket max will be $5k per year at most.
Total expenses of $11k per year for the most expensive locale in the US. And that is assuming you max out health spending every year, which probably will not happen. And that is off the family has only one working adult.
And you get an HSA to invest $7.3k per year and withdraw it tax free at any point in the future. You can have a few hundreds of thousands saved up for healthcare expenses by the time you retire, all tax free.
I have seen gold metal level plans high deductible health plans that qualify for HSA. I do not know about platinum, but the difference in gold and platinum is gold covers 80% of expected expenses and platinum covers 90%.
My gold level high deductible health plan has a ~$3k deductible I think (for family coverage).
I imagine even a platinum plan can be high deductible if the deductible is set to equal the out of pocket maximum.
Either way, the numbers will not be too different for gold and platinum plans.
> Assuming you are seeing in network providers, which for a top tier platinum PPO should be almost all doctors, and a BCBS plan would be nationwide, then your premiums would be say $500 per month for a family of four, and out of pocket max will be $5k per year at most.
You're wrong. I'm not speculating here, I'm talking about the real numbers.
My monthly premiums for a Platinum PPO plan through my employer (in Silicon Valley) is slightly over $2K/month (for a family of 3). Same plan at my previous employer, same price (a bit cheaper but that's because it goes up every year). This is also very similar to what an ACA plan would cost. Your guess of $500/mo is way off.
So out of pocket is ~$25K on premiums alone (pre-tax though).
> Why would it cost more than the “so called max out of pocket”?
You can easily go above what the insurance company calls "max out of pocket". Again, I'm not speculating here but telling real experiences.
That's because if you get a bill for, say, $10K, the insurance company can decide they will only pay $8K so you're stuck with $2K. But not all of that $2K is counted against the out-of-pocket max. The insurance company will say only some smaller amount, say $500, will count as credit towards the out of pocket. So I get to write a check for $2K but in the eyes of the insurance company I've only paid $500 this year. Repeat a handful of times and I can easily go over the so-called max out of pocket in real money.
> My monthly premiums for a Platinum PPO plan through my employer (in Silicon Valley) is slightly over $2K/month (for a family of 3). Same plan at my previous employer, same price (a bit cheaper but that's because it goes up every year). This is also very similar to what an ACA plan would cost. Your guess of $500/mo is way off.
My calculations are for the portion the employee pays directly, meaning the ~25% to ~30% the employer does not pay.
Since all employers of this caliber part the 75% portion as a benefit without option to receive it as cash compensation, it is not appropriate to consider the employer subsidized portion in the amount the employees pay.
> That's because if you get a bill for, say, $10K, the insurance company can decide they will only pay $8K so you're stuck with $2K. But not all of that $2K is counted against the out-of-pocket max. The insurance company will say only some smaller amount, say $500, will count as credit towards the out of pocket. So I get to write a check for $2K but in the eyes of the insurance company I've only paid $500 this year. Repeat a handful of times and I can easily go over the so-called max out of pocket in real money.
If you have an ACA compliant plan, which the platinum designation indicates it is, this should not be happening for in network services that have prior authorizations. Either the insurance company thinks you are being given superfluous treatment not supported by evidence, or the insurance company is ripping you off in which case you need to file an appeal.
> it is not appropriate to consider the employer subsidized portion in the amount the employees pay
I'm talking about the employee-paid portion deducted from paychecks.
People who are surprised by this tend to be single. Most companies usually pay close to 100% of the employee premium. But they are far less generous on the family member premiums.
> this should not be happening for in network services that have prior authorizations
There's a lot of insurance company weasel wording in that phrase. Plenty has been written on how when you go to an in-network hospital, turns out that every doctor who shows up while you're unconscious (some of whom you'll never even knew saw you until the bills arrive a few months later) is actually an out-of-network contractor.
Lots of things shouldn't be happening, but happen every day in the US health care industry.
> People who are surprised by this tend to be single. Most companies usually pay close to 100% of the employee premium. But they are far less generous on the family member premiums.
I can see this happening. However, in my ~3 different employer experiences, the employee and children are very well subsidized, and the spouse is the only one the employer usually does not cover to incentivize the spouse to use their own employer’s subsidies.
> There's a lot of insurance company weasel wording in that phrase. Plenty has been written on how when you go to an in-network hospital, turns out that every doctor who shows up while you're unconscious (some of whom you'll never even knew saw you until the bills arrive a few months later) is actually an out-of-network contractor.
This is true, and I had not experienced it. Good news is that is illegal now:
The last couple years have had quite a few good rules come into place, including another one that obligated your doctor/hospital to give you a good faith estimate for which you are only responsible for the estimate + $400.
It is still extremely risky and costly in the US, even if you have nice employer subsidies because the second you lose the ability to work, you are on the hook for many, many thousands of dollars of expenses at the same time you no longer have income. And then if you want government help before age 65, you basically have to liquidate all your assets and become poor forever. Dual income families are almost a requirement just for that reason.
Age 50 to 65 is extremely risky in the US. A few wrong steps and you are deciding between sacrificing your kids’ future to save yours.
What are you talking about? I’ve worked in two top tier companies and the most I’ve ever paid for the coverage is $120/month (1 firm I paid nothing). How are you paying $2,000/month at a “top SV employer”. I’ve never had to pay more than the maximums (how does that even happen), and my out of pocket costs have always been under $50/visit for a specialist visit. I really don’t understand how you get these numbers.
To be fair, the OP with that high cost was using a 'Platinum' PPO plan as the comparison, i.e. zero out-of-pocket (besides modest copays). Almost nobody offers these plans anymore, because they're ludicrously overpriced. Most plans are premium PPOs with a deductible of $500-1000 or HDHPs.
Besides bragging rights, I can't see why anyone would want the Platinum PPO. My 'HDHP' PPO costs me ~$200/month for a family and has a family OOP max of $6K. Even not including the HSA tax breaks and the $2K contribution to that HSA from the employer, that extra $1800/month for the 'no cost' PPO would easily be hit by the OOP max in only a few months. That's assuming you actually hit the OOP every year.
just out of curiosity. What happens(to citizen/employee) if due to some health issues they are not able to perform their job as a tech worker for 6-12 months?
People have good care in the US too, just not everyone. If you’re highly desired to be considered part of the brain drain of Europe then you’d likely be able to get good healthcare.
Why would you leave anymore, as remote working has become common? Quality of life has always been a major reason for staying in Europe, while low professional salaries have driven many away. Today the latter is much less important than it used to be.
1. It's not as common as everyone claims.
2. Big money comes with US companies, and then you can be at whim of US timezone, or worse, a big company that is not remote-first or asynchronous.
I don't think many people I know would abandon family, friends, language, and culture to move to a different country unless the incentive was very high. Moving to the USA is also quite hard and the rhetoric around it isn't great so even a double or triple salary (which I've heard is the norm in some industries eg. software) isn't particularly tempting.
I doubt Germany, France, Austria etc. would see much significant drain. Poorer countries (eg Poland) have been already hit quite hard and might be impacted a lot more by this though.
because Europe has a incredible quality of life? Where would you move? There are some attractive cities outside but they are not many imho. I don't want to drive a car, want to live urban and with a lot of alternative culture around me. I am done with suburbia. It's the other way around, why should I move? There's quite a few reasons to stay in Europe. It's not all about money (assuming inflation stays manageable, but it's a war here, who knows).
I also doubt the amount of braindrain, i see a lot of brain-gain where I live (in the south of germany and I don't include europeans).
That relies on the assumption that money is the sole reason to decide where to live. Even from a monetary perspective, top talent can easily earn >100k€/year in Europe too, which enables a very good lifestyle given that you have to spend way less on social services. That‘s not to mention the rise of remote work if you prefer to work a US-based company.
Less? By what metric? The tax burden is lower in the US than in Europe by a good amount. Does paying a lot more in taxes not count toward paying for social services?
You pay more in taxes, but when you become more vulnerable (older, less healthy) you are safer.
The problem with money savings is that they might not keep their value. Last thing I want is to be old, ill, broke and living in a country with no free social services. That said, it all depends on the risks one wants to take... Life is dangerous. :)
You are right - it would be better to compare something like the yearly middle-class lifestyle spendings of a 100k€ and 200k$ family all things considered. I would think the difference is smaller than expected considering housing alone. However, a large drawback in Europe is that the upper-ceiling of earnings in Tech is much lower than in the US, there is not much air above 150k€ unless working in management at a large corp.
Canada is a much better option for many, because pay is closer to us but people also get nice healthcare. The best option would be Switzerland.
On the other hand in Eu there are places where qol is much better compared to what you can get in us(be that Netherlands, Denmark, some parts of germany/france/spain) and this qol is improving each ear even in poorer eu countries. Tech workers can get a more than decent pay at faang style companies or by working remotely for us
Citation needed, specifically regarding your use of the term "a lot".
Sure enough, if you take the small percentage of extreme tech talent or very entrepreneurial employees, many in that group might consider taking their business to the US.
But how much is that really? 1%? 5%? Can't be much more. So, 95-99% don't...hardly a brain drain.
The other thing Americans can't seem to comprehend is that not everybody is a dollar-chaser. For the typical European, if they have a decent quality of life and some reasonable disposable income, they are satisfied.
* Top 1% pay 48% of all income taxes
* Top 5% pay 59% of all income taxes
* Top 50% pay 96% of all income taxes
* Bottom 50% pay 3% of all income taxes
The point I made is that I don't expect a "lot of braindrain" from Europe and that this concerns a tiny percentage willing to move to the US. What is the relation with the tax revenue you shared?
It could be as simple as just enjoying your 40 hour workweeks and 2-4 weeks of vacation, which many western European countries have written in stone / law.
The counterpoint to that will often be "But, why not just work extra hard in the US for 10-20 years, and then retire? I'd much rather work hard now, and then live my life at [30/35/40]" which is probably also a valid point, but Americans will soon notice that Europeans are in a much less hurry to "retire".
It all comes down to labor laws, and work/life balance.
There are TONS of talented workers in Europe, that live just fine as it is. And many just truly enjoy a relaxed, easy, and predictable lifestyle.
They did that indeed, especially in the early days to avoid a complete collapse, but since then it's not the primary mechanism at stake.
This is a great reminder that keeping your money afloat is not that hard as long as you can export. (For the record, what destroyed Venezuela comes from the fact that they needed to import light oil in order to process their heavy one. Once the sanctions cut the input flow, the output flow dried up pretty quickly and it was game over)
I don't think it will matter long, given the catastrophic failure of the Russian military (which is currently demilitarizing Russia pretty quickly, how ironic), but from the economics PoV it's still interesting to witness.
What definition of strong are you using? Ruble (only one l) has historically been around 85:1 and now its ~60:1. (Rubles:Euros, i.e. 85 Rubles for 1 Euro)
Can you actually trade ruble? For some reason, for example, Sep-2022 futures chart for ruble has a gap between Jun 15 and today. And forex.com claims USD/RUB and EUR/RUB are unavailable for trading.
Yes, you can still trade it. Foreign currency exchange is decentralized. Us and EU exchanges have stopped trading and ruble, but you better believe in the n in Chinese exchanges still trade it
I think you are theorising too much based on a bit of Russian propaganda. I looked at a few exchanges and the spread on rubble is so high you could not buy more than a few dollars at the rated prices.
Look at the spread at the Bank of China ( China's largest bank and foreign exchange).
They are buying rubles 10.75 RMB and selling at 12.5 RMB. They are selling USD add 674.
This gives 63 rubles to the dollar.
The fact is that major economic powers in the world have not signed onto sanctions and have access to both Russian and Western currency.
It is true that many parts of the West have lower need for rubles because of sanction, but if you I think that the entire Globe has frozen trade with Russia and trade in Russian currency, you are the one that has fallen for propaganda. They just no longer can use western exchanges to convert currency. See the link below.
That's a huge spread, which is exactly what I was talking about. You buy 1$ for 63 rubles on that bank chances are the 2nd dollar will cost you 64 rubles. Need to see the order book and market depths at different prices. High spread also means there haven't been many trades recently.
Did you read the link? $703 million worth of rubles is being traded a week, and that is just yuan and just one exchange.
So far you have changed your position from you can't trade it at all to the spread might become incrementally worse if trade exceeds 700 million US dollars worth a week
The ruble is strong because imports have been cut in half due to sanctions, while exports continue unabated. Actually, Europe sends more money to Russia now than before the war.
>The contracts likely have clauses related to failures to deliver, and Russia will have little influence over how those clauses will be implemented.
Im sure there are plenty of clauses, but once you are at economic war with a country, the contracts don't matter. They aren't worth the paper they are printed on. Thats my point.
Russia says old contracts are void and has the gas. EU Can agree to new contracts or go without. They cant use the old contracts to make Russia give them gas on the original terms. What will they do if Russia refuses? sue them for breach of contract, sanction them, and seize their foreign reserves?
The answer is easy. They are going to claim the money from the reserves that were put on hold until the war ends.
E.g. if Russia would continue with gas supplies, the money for gas would got into the locked accounts. After war would end, Russia would get locked accounts minus reparations. Now if Russia stops supplies, after war ends Russia will get locked accounts minus reparations minus penalties for the failure to deliver gas.
I dont think Russia cares about the reserves because they don't think they will ever see them again. Reparations could easily exceed the total reserve.
Plus, they aren't planning to leave Ukraine, so they aren't planning to get it back
Therefore the money is a sunk cost and not leverage. Therefore finical penalties don't matter.
There's a circular logic in your claim. You claim they aren't planning to leave, and therefore it is not leverage. But the point of that is to exactly affect the plan to leave, which is not set in stone, obviously. The fact that they aren't leaving right now doesn't guarantee they won't leave in the future.
I think you are confusing consistent logic for circular logic. Putin never plans to hand back eastern Ukraine, why would he care about something that affects russia only if it does? They are not planning for failure.
The u.s. and Canada have a demilitarized border. This would be bad for the u.s. if we went to war with Canada. However, we don't plan to go to war with Canada, so we aren't basing our decisions on that outcome.
There are certainly things that may make Putin and more specifically Russia (which can also let go of Putin) let go of eastern Ukraine. In fact, there's a spectrum of such things from nicely asking, through sanctions and military resistance, all the way up to a second front opening on the border with China or nukes flying. The plan (whatever it is) has a line drawn somewhere on that spectrum, which signifies it is time to let go. And every new bit of military equipment, fines, sanctions is pushing it slowly toward that line.
Your claim is essentially there's no line, or that there is not a spectrum or that that line is beyond any economic measures. But there's no proof of that, so the logic in your "proof" is circular because your proof predicates on you knowing exactly where the line is (or isn't), when the location of the line is the thing to be proven.
I'm not saying there is no line to get Russia out of Ukraine. Anything is possible.
I am saying that it unlikely to be reached and my personal opinion is we are moving further from it not closer.
I'm also saying that Russia is not making decisions as if it will be crossed. They are doing the exact opposite, making decisions assuming that they will not be forced out and will not get the reserves back.
I don't think they would realistically get the foreign reserves back even if they left, so that isn't much of an incentive.
The US and EU have to much politically at stake to hand them back, even if they leave. It would be seen as letting Russia get away without consequences for the invasion.
Time will prove one of us wrong. In 5 years Russia will either be occupying Eastern Ukraine or not. They will either have control of the foreign reserves back or not.
I think that's not completely obvious how it works at the moment. Russia has unilaterally required payments in Rubles despite long-term contracts saying something else. Some smaller countries have refused and got cut of any deliveries. EU has generally declared not to pay in Rubles, but I don't know what e.g. Germany does at the moment. There is no realistic exchange rate for the Ruble because Western companies don't want to touch it and Russian companies have been forced to buy Rubles for most of the foreign currency they get.
>The EU’s executive body told the EU governments in a closed meeting that the authorities were not preventing companies from opening accounts with Gazprombank and would allow them to buy gas in line with EU sanctions.
>The EU will get a taste of what this means as Russia is turning off the still-operating Nordstream 1 pipeline for ‘routine scheduled maintenance’ from next Monday, July 11th to July 21st.
Sanctions would be stop selling gas. Just saying look we have this contract, we want to continue with it, but we change the terms without asking sounds something else.
To make priorities clear: Attack war is a crime and Putin, his government, and army leaders belong to Den Haag and then into prison.
But every westerner continuing to drive their car, fly to holidays and other wasteful lifestyle activites makes energy prizes go up and pays for Russia's war. Europeans a bit more directly than Americans, but in the end we have a global market so nobody goes free of reponsibility. Nothing they will end up in court for (would be a miracle if even Putin did, Bush and Blair didn't for doing not too differently), but certainly morally wrong.
Haven't checked recently but a month ago or so it was said Russia earns more money for oil and gas than in February, despite the volume having decreased quite a bit.
Ok, I don't follow the details so closely, I assume you are correct.
Which Russian companies still have significant income in foreign currency? I thought trade has mostly stopped. Except for energy, but that is dealt with in a different way anyway as discussed above, because still excluded from sanctions from the West and the Ruble requirement from Russia.
Then there is of course China and India which seem to intensify trade. No idea what currency they pay in and whether the increase has already been significant during 4 months.
But they pay in euro to gasprombank and Russia is doing conversion on their behalf. It's a flex to say that EU is paying in rubles for propaganda, when they are not...
But isn't the end effect the same? End result is euros are being dumped for rubles by EU nations themselves.
Once the euros are converted to rubles, it's unlikely they get converted back into euros somewhere else in the supply chain. As opposed to USD, which facilitates 87% of world trade.
There is a difference. Russia is free to convert money as they wish, just as they could do in the past, nobody is forced to do conversion by themselves
The contracts are in euro/dollars, what "paying in rubles" actually means is that Russian exporting company must sell euros for rubles immediately upon receipt, so that the euros can't be frozen via sanctions.
If no one will be there you can drain the pipes and leave it unheated over the winter. People typically do this with summer homes.
(I think this thread is silly though: there's no way enough people will move to warm climates for the winter to make a dent in cold-country fuel consumption.)
At least in the UK, the part of the bill that is really increasing is the Standing Charge (a charge just for being connected to the gas network). So even if you turn off your heating your bills are still going to increase.
I think their big thing was understanding the difference between stated preferences vs revealed ones. They took away beloved perks of flying, and managed to show that people weren't willing to pay what it cost to provide them.
I still remember their proposal for ultra-cheap standing-only tickets (couldn't get that one past regulators). Kinda wonder if it was seriously meant or not.
Any non-flat rate pricing for baggage is godsent. I've long been annoyed that US airlines will charge the same amount to check a small bag, with a few pieces of lightweight passenger cabin contraband, as to check a giant 50 pound duffel bag.
So long as the airlines rigidly enforce carryon size restrictions. It was bad enough when baggage was free, now you’ve got people slamming steamer trunks in the overhead cabinets just to avoid the fees.
Unless the flight is sufficiently empty, Ryanair staff often walk around the gate and get anyone with a large or heavy-looking bag to put it on a scale.
(They have the scales available before check-in, so it's reasonably fair.)
That’s the game with discount airlines. Not only baggage, but $ to print your boarding slip, $ to pay luggage fees at airport, etc.
If you read the costs closely and can avoid them, they work great. I flew from SFO to Stockholm with Norwegian Airlines for $400 return on a 787. About the same as SFO to JFK.
But it was no frills. No even free water served (you could ask for it) or any meals. If you prepare it’s great. If you don’t it’s pricey.
There was a similar deal for Paris/SFO return for $300, but United Airlines was determined to undercut them, so I got a United Airlines return flight instead for $275. The billing summary was hilarious:
Fare USD $ 1.49 Taxes & Fees USD $ 273.96 Total USD $ 275.45
Same. They seem to be one of the few airlines that are well run. Maybe cause the founder is still CEO, I don't know.
I also respect their honesty. They tell you "we get you from A to B the cheapest way", no more. Traditional airlines' ads are all about traveling in luxury, which is extremely dishonest considering 99% of their travelers experience a not-far-from-Ryanair level of comfort.
Ryanair have a long history of very savvy, far sighted planning. Back in 2001 when many airlines cancelled orders for Boeing planes after 9/11, Ryanair signed a long term contract for 155 brand new 737-800s at a huge discount. They've taken out some smart long term options on jet fuel before a well.
cake was not like we have today, it was dough used to line the oven to keep the actual baked good from burning, like how some recopies say to have a pan of water in the oven.
In terms of the sentiment, The EU dug the hole on this one, and de-nuking their grid was just plain stupid.
The problem with CNY are several fold: defacto peg, difference in price between onshore and offshore cny, strict currency controls make treasury operations challenging for real users of the currency, governmental policy of treating foreign holders different than domestic, etc.
At the end of the day most currency holders want a liberalized currency and CNY is far from that.
I remember some Reddit post asking about CNY and the replies were all “Wait, all the rich Chinese are desperate to get their money out and you want to bring your money in?”
In this situation the US is importing deflation (Euro) and the EU is importing inflation (USD), assuming you pay in the currency of the country you're buying from.
And given the deficit there is more of former happening than the later.
I may be wrong but international trade is often labelled in US Dollars [0], so for US entities buying at EU, it would change little, while for EU entities buying in US, it would be costlier as they would have (or their bank) to buy more Dollars to pay for the imported stuff.
For US entities selling to EU, nothing changes, but for EU entities selling to US, they would receive less Euros for a given amount in Dollar. As their cost structure is in Euro, they will have a lower net income.
I actually have long term questions about the viability of the EU as a major global player.
It doesn't have the natural resources that the US/Russia/China have. It is interesting that the time was the nations that would be the EU were most dominant, they used colonization to get the resources from all over the world (see for example British Empire).
In addition, there is still lack of political unity, with a much less powerful centralized government compared to say China or even the US.
Well, it does have resources. Wine from France, for example. Natural gas and oil (Norway for example). But the EU, so long as it avoids political fragmentation will be ok because they can manufacture products and they have skilled workers and knowledge. It's not just about resources.
Natural resources are overrated, human capital is vastly more valuable. The EU has a large, highly educated population with stable civic institutions. Sans another major war, Europe will be fine.
All poor countries in the EU are brain drained... more and more educating the population is benefiting rich western states, more than the ones that produced the human.
I've had many arguments with people where I can't get it across that it costs a lot to get a human being all grown up, socialized, educated and ready to work in high value industries. Then we get them swept away to the west (and for good reasons, more money, higher quality of life etc.) and end up with nothing for all our societal investment. If we're lucky, some of them come back with some know-how and create a viable business, but most don't bother.
3 / 4 of the people I went to school with (primary, secondary, high school and college) are now gone for good. Almost as many upcoming graduates (soon to be 18+) are planning to either study here and go, or just go.
This pains me as someone that decided to stay behind and try to change something. But I do understand their motivations.
>Natural resources are overrated, human capital is vastly more valuable.
They are overrated until you don't have any. It's hard to manufacture anything without natural resources. It's hard to heat your home or fuel your car. As far as the "stable civic institutions" the farmers in the Netherlands would like to have a word with you.
The entire Western-led global economic order is designed to pry open new markets, especially ones that provide important resources. That's why it's sometimes called neo-imperialism. China has become a major power with the aid of that economic system and is now inexorably tied to it. The fact that it has a lot of natural resources is incidental. It followed a very similar development strategy to Japan, Taiwan, South Korea and Singapore - all economically thriving countries that lack natural resources. Russia on the other hand has become severely diminished by it's inability to integrate into that economic system. It's biggest exports are natural resources, much like any given developing country.
I think any sober assessment of which regions will achieve or maintain economic preeminence in the coming decades would have to include Europe and almost certainly exclude Russia.
Maybe more interesting is that the Euro is also down vs. the British pound and even the Japanese yen. It's true the US dollar is appreciating against almost every other currency, but the euro is down even against the Swiss Franc, presumably also impacted by the war in eastern Europe and its threat to grain and energy imports.
Hopefully this is going to be a wake up call but probably not. The US economy is much more robust, USD is the reserve currency and it also doesn't help that capital is fleeing to the US.
It's not like that's a particular problem for Europe though. The US imports more from China than from any other country, and about the same as it imports from the entire Euro zone.
Every country is dependent on everyone else at this point. We're all in it together. We do need to be smart about it though. We've been particularly dumb about Russia ever since 2014, that's crystal clear now.
I think relying on (taking advantage of?) cheap Russian gas is only a mistake if you also think that giving Russia a pass over annexing Crimea was acceptable. In reality choosing to do both was a catastrophic error. You can make deals with your enemies (and both Russia and China as oppressive expansionist autocracies are choosing to be our enemies), as long as you make it clear where your boundaries are. We didn't do that clearly enough with Russia, and cannot afford to make the same mistake with China.
Yep, all on it together. But governments in China and Russia don’t have to care about their populations’ wellbeing. They can do bad things and then violently repress dissent.
Western democracies can do that only to a very limited degree. That’s why economic interdependence doesn’t work with autocracies.
The Euro is down a few percent on the pound, but GBP:EUR has been overall stable +- 5% since about 2016. In 2016, it was roughly 2:1 for GBP to Dollar, and 1.4:1 for the euro, but the pound lost a lot of value after that.
Edit — sorry, misread the graph scale there. At any rate, the euro has been more stable against the pound in the last few years than either of them have been against the dollar.
The pound hasn't been 2:1 with the dollar since circa 2008. That was the high pre financial crisis. It mostly traded between 1.50-1.60 from then till 2016.
Yeah it's not just the USD being strong but also the Euro being weak.
Main reasons:
- the EU currently has a trade deficit. This is the first time ever. Reason is the energy crisis due to sanctions against Russia: energy prices have skyrocketed and EU is importing loads of energy
- the ECB has been printing money like crazy in the last 14 years. So far this money had been absorbed mostly by banks but slowly but surely it is starting to trickle into the real economy. Recently the ECB has finally increased interest rates and stopped buying Southern European bonds, however they had to start up their bond buying program again because Southern European government bond interest rates went up dangerously fast. This has undermined the belief that the ECB will be able to effectively battle inflation
> Recently the ECB has finally increased interest rates
Did they? I thought they agreed (or iterated) that a rate increase is almost certain. But the increase itself is yet to happen (and it's not clear they are going to increase it by how much)
> the ECB has been printing money like crazy in the last 14 years. So far this money had been absorbed mostly by banks but slowly but surely it is starting to trickle into the real economy.
This is wrong, none of the money the ECB "prints" goes out into the real economy (see [1] e.g.).
It definitely does go into the real economy. They mostly use the new money to buy government bonds, and governments end up spending it (mostly) on people, who then spend it on things. The article you cited is just an explanation of the (long, complicated) technical process by which this happens. The claim money printing doesn't cause inflation is mainly backed by the claim that most Americans used the money "printed" and given to them by the USG to pay off debts, thus destroying money again. But it doesn't really destroy money if you're printing money and then using it to pay off debts. It just devalues the debt itself, because the total money supply has still increased, so the repayments are worth less than the lender expected.
You can't own central bank reserves at all, but all banks accept them for money transfers from other banks. That's how money transfers between banks work and being able to do that is why you have a bank account at all. Paying for things this way is as money as it gets.
Yes, central banks buy government bonds from commercial banks but that is irrelevant. The commercial banks effectively act as pass-throughs. They buy government bonds knowing that they'll immediately offload them to the central bank. The way money printing works in the modern economy is much more complicated than it used to be, but it boils down to the same thing with the same problems.
Until recently the Swiss National Bank was mostly concerned with pushing the franc down, they had the lowest rates in Europe (and after the recent raise they're still negative at -0.25%), after many years of this they've accumulated over a trillion USD in foreign reserves. Trading in the other direction and keeping CHF up should be fairly easy for them.
The main issue is that the ECB will be unable to raise rates sufficiently to combat inflation because some EU member states will be in a lot of trouble.
This article mentions the interest rates issue but glosses over it.
Imagine two currencies ABC and DEF. They are at parity (ie 1 ABC = 1 DEF). ABC's central bank has 10% interest rates. DEF's central bank has 1% interest rates. What happens? ABC strengthens against DEF just based on the interst rate differential.
Why? Imagine if it didn't. You could borrow DEF 1B, convert to ABC, earn 10% interest and then pay it back later. If the exchange rate remains fixed, that would be a risk-free return of 9%. Because of that it doesn't happen. Think about it. This creates demand for ABC.
Because of skyrocketing inflation, the Fed has raised interest rates. Europe has not [1] and really can't.
Secondly, in uncertain times, there is nearly always a flight to the safety in financial markets, which usually means US Treasury bonds. This too creates demand for US dollars.
So there are issues with th eEuro but really what you're seeing is a strong US dollar. This is a temporary situation.
I'm not saying the energy issues in Europe aren't significant. They are. We can hope this creates pressure for a peaceful resolution to the war in Ukraine. This idea seems to make a lot of people angry like it means capitulating to Russia. Every conflict ends diplomatically (including WW2). Russia too is facing pressure to find a win and end the war as it's not sustainable long term so we're really in a game of chicken. Putin may be hoping a European winter (where the effects of an energy shortage will be more pronounced) will sway the odds in his favor.
Can you explain a little bit about what you mean by the "...and really can't" line? Is this just because they lack some of the mechanisms of a true central bank as a shared entity across the eurozone, or something less obvious?
Italy and Greece have a lot of debt so raised interest rates means their payments go up a lot more. Since they are part of the euro and can't print their own money they have no easy options.
I think it's because some of the member states are already heavily indebted with weak economies, like Greece and Italy. A recession caused by monetary tightening may be annoying for Germany or the Netherlands, but very bad for most of the southern European countries.
Italy already pays 1.9 percentage points higher rates than Germany, and has 140% debt to GDP. If the ECB sharply raises rates, then Italy's debt might become unsustainable. The Economist notes: "The country probably cannot tolerate yields on its bonds much above 4%. Around that point, the goals [of the ECB] of price stability and defending indebted countries would become irreconcilable.
Should interest rates surge, the euro area would look dangerously frail. "
So, a certain level of inflation is actually good. The general benchmark modern developed nations go for is 2-3%. High inflation can cause all sorts of problems even without getting into hyperinflation. Negative inflation ("defaltion") or even zero inflation causes problems too. Just look at Japan over the last 35 years to see this in action. Deflation promotes saving rather than spending such that there is less economic activity and this has a knock-on effect on creating unemployment.
Side note: lack of consumer spending is a ticking time bomb for China thanks to having to fund your own retirement and the demographics caused by the One Child Policy.
So 2-3% is really the sweet spot.
It's also worth noting that countries that run deficits like inflation too as it decreases the real value of their debt.
Central banks can contrl interest rates by setting the benchmark rate. For example, if the Federal Reserve offers 5% for US Treasury bonds (which are considered essentially "risk free") then why would a bank lend a business or you money at less than 5%? It's more risk for a lower return. This is monetary policy.
So as you can imagine if someone can only borrow money at 20% vs 2% it will have an impact on economic activity. That's the point. In the US, high inflation is seen as being driven by demand outstripping supply so interest rates are a crude tool for reducing demand. That's why the Fed has been raising rates.
The eurozone largely has the same inflation problem thanks to energy demand and housing but doesn't have the economic activity driving it. So if the ECB were to aggressively raise rates, the fear is this could cause a deep recession in the eurozone.
So that's what I mean by "they really can't> The eurozone has the inflation but not the economic activity.
You're quite optimistic. I fear this is a 1930 moment. By the end of the decade we might have a Nazi Russia, WW3, North Korea attacking the South, China taking advantage of the situation and invading Taiwan. Japan remilitarising and maybe becoming a nuclear power.
I'm not sure if you're talking about Putin or after Putin. Putin is an autocrat in all but name already. It's unclear whta'll happen to Russia when Putin inevitably dies. It could plunge into chaos, which is a big risk of any cult of personality.
But Ukraine has revealed that Russia's military is a paper tiger. Russia too is in decline (demographically).
> WW3
So if we actually have nuclear war between major powers, it's over. There's really no point worrying about this happening because it's unlikely you can impact this outcome so you'll be better off just assuming it won't happen.
> North Korea attacking the South
I don't fancy their chances. Sure NK has a large standing army but they can barely feed themselves. Kim Jong-Un isn't an ideologue. If anything, he's Saddam Hussein, which is to say he's motivated by his material reality rather than, say, any kind of fundamentalism. Kim likes his luxuries. Attacking the South would invite his own personal ruin. The only way I see this as realistic is if NK will otherwise collapse. Is a collapsing NK really that much of a threat? I mean they could cause a lot of people to die but could they succeed? I somehow doubt it.
Remember too that NK only really exists because China wants it to exist. China, like any major power, likes having buffer states between it and other major powers. The US is no exception here either. The US almost started wW3 over Cuba after provoking the USSR (ie Jupiter MRBMs in Turkey).
China doesn't war on th eKorean peninsula. China likes things the way they are. Just how long would NK survive without Chinese support?
Side note: it has been a huge failure of US foreign policy not to consider that Putin too would want a buffer to NATO.
> China taking advantage of the situation and invading Taiwan
What'll eventually happen with Taiwan is a big open question. China knows what a shitstorm it would be to invade. Success isn't guaranteed either. A small body of water can be a huge barrier to even large militaries. Only 17 miles separates England and france at the closest point and Nazi Germany could never cross it and invade. Had there been a land bridge, the UK would've absolutely fallen in 1940-41. No one has successfully invaded England by sea since 1066.
> Japan remilitarising and maybe becoming a nuclear power.
Japan is a declining power due in large part to demographics. Japan is a bit like the UK in that it is highly dependent on imports. It also has a major power in the form of China as a direct neighbour. I really doubt Japan is the will or even the means to become a major military power.
I'm honestly way more concerned about the rise of fascism in the United States than anything you mentioned.
>Japan is a declining power due in large part to demographics.
I mean, if you're calling Japan a declining power due to below-replacement birth rates, then every industrialized nation, including Russia and the US, is a declining power.
> But Ukraine has revealed that Russia's military is a paper tiger
Russia has lost the blitzkrieg but gained ground in Donbass through regular warfare. They are throwing USSR era resources into the battle and haven't even issued a general mobilisation order. When China is going to sell them computer chips, they will have the resources to build guided missiles and ICBMs. I'm afraid they are not quite the paper tiger that the Western press is painting them to be, nor the 'glorious' USSR. I hope this war would end up like Afghanistan for Russia, further weakening it and leading to yet another break up. But it might end up like Chechnya.
China is showing a unwillingness to really help Russia in any meaningful way, because they likely fear the ire of sanctions as well.
I don’t think much can help Russia at this point in time it’s really just a matter of time till they run out of steam, it is Afghanistan all over again.
Well, uncovered interest rate parity would have DEF strengthen not ABC.
There are indeed other mechanisms, e.g., currencies with higher interest rates experiencing higher demand, but that also has limits/doesn't hold strictly etc.
Would you really go into "broken currencies" with high interest rates, for example?
The carry trade in FX, i.e., borrow in low yielding currency invest in high yielding currency is a classic trade, but it is not risk free. FX can move against you.
Basically, uncovered interest rate parity says that the interest rate differential creates an offsetting effect in the FX rate. Empirically, that is a bit shaky/doesn't always manifest, there are debates on time horizon, etc., though. In short, FX not easy to predict.
> ABC's central bank has 10% interest rates. DEF's central bank has 1% interest rates. […] You could borrow DEF 1B, convert to ABC, earn 10% interest and then pay it back later. If the exchange rate remains fixed, that would be a risk-free return of 9%.
If you have now 100 ABC = 100 DEF you have the choice of getting in 1 year 110 ABC or 101 DEF. If ABC depreciates against DEF and in one year 1 ABC = 0.918 DEF both choices become equivalent.
You're trying to draw a distinction that doesn't exist.
The Allies said to Germany they wanted unconditional surrender. The Germans agreed. Various terms were agreed to including the cessation of military operations (on both sides). This is, by definition, a negotiated agreement ie diplomacy.
Putting the highly questionable ethics of the two atomic bombings of Japan aside for a second, these bombings like any military operation are ultimately a negotiation tactic.
This isn't about the Euro. Yen is at a 20 year low as well, and pretty much all other currencies are soft too. Its dollar strength, interest rates in USD are much higher and going up (for now).
Is it the Euro sinking or the US dollar rising? The U.S. dollar has been gaining a lot of value over the past couple of quarters - enough so to call into question whether inflation is being caused by currency policy, as the Federal Reserve believes, or being caused by actual supply constraints - as I and several other economists believe (but I'm not an economist). The fact the dollar is rising in value and yet prices have still continued to rise tells me the problem is supply.
Supply shortages are something Western policy makers haven't had to contend with for quite some tine, certainly not in the lifetime of the policy makers!
But that basket of currencies is composed of 57.6% EUR. I'm barely an amateur observer of these markets, but it seems to answer the question "dollar sinking or euro strengthening?", it'd be better to look at a basket of currencies that excludes the euro in order to tease out the principal components of the move. And really, should probably also go the other way that looks at a basket of EUR/XYZ currencies and exclude EUR/USD.
But again, this is not at all my area of expertise; I'm a rank amateur with barely any skin in the game. I'm very happy to learn other opinions and ways these things are determined.
There's also the Euro Index (EXY) which is hitting all-time lows (at least as far as this chart goes back). Of course EXY includes the EUR:USD pair so it's kind of the reverse problem.
It’s a fair point. In the last year USD.EUR is up ~20%, dollar index is up ~20%, so to your point the other half the index is has also weakened against the dollar. WSJ Dollar index which is even broader is also up.
Can someone ELI5 how the USD can go up vs EUR if US has higher inflation (about 1% or so) than the eurozone (or at least Germany). Wouldn't that mean that stuff gets cheaper in EU compared to US? Shouldn't there be arbitrage at some point?
There is no arbitrage because the USD is expected to weaken against the euro due to higher interest rates. The December 2022 EUR/USD futures are trading at 1.016
Interest rates and interest rate expectations are pretty much the most powerful driving force in the currency markets. The US is at 1.5%, the Euro area is still -0.5% a 2% differential and it seems likely the FED will keep raising rates more aggressively than the EU will.
> whether inflation is being caused by currency policy ... or being caused by actual supply constraints
No reason it can't be both. Plus USD is still viewed as the safe haven fiat currency (deserved or not), so USD always displays relative strength vs. other fiat currencies when there is stress in the markets.
There are 28 large scale LNG import terminals in Europe. One or two more in Germany wouldn't change the scale of the problem much.
The actual original point though, was that ECB cannot raise rates without causing Italy and others to default, or requiring 'austerity' that would probably cause civil unrest. That isn't the fault of the Germans. It is the fault of other European countries that have never got a grip on their government spending levels.
There's literally no way to get gas from those terminals to Germany on a large enough scale. They really went all-in on dependence on Russian natural gas and their politicians seem to have been richly rewarded for it.
What does it mean to be supply constrained? The simple definition means you don't have enough supply to meet demand, but that's too simplistic a definition. Supply constraints can happen for two reasons. The supply curve can shift (i.e. a decrease in supply), or the demand curve can shift (i.e. an increase in demand). The Fed's 0% interest rate, coupled with unprecedented government stimulus, lead to a huge increase in demand. So yes, technically, we are supply constrained, but we are supply constrained because of an increase in demand caused by government policy.
Just an example, as part of the CARES act, congress allocated 800 billion for PPP loans that were supposed to go towards payroll. Now the Federal Reserve finds only 25% went to employees. So that was basically an unnecessary infusion of 600 billion into the economy over a really short time window. And that money went to people who already had plenty of money. Is it a surprise why the housing stock is so low?
I think supply shortage is the reason for the high prices. I can't get supplies for my business.
My new treadmill at the business was supposed to be delivered last April. They have not provided a new date.
It took LG 6-7 months to replace (ship) the broken TV under warranty.
My franchise changed towel/linen manufacturing 3 times as old suppliers are not able to deliver. New prices have more than doubled.
Lotion order I put in Nov was delivered in June.
Some might say this is anecdotal but this is the case at every single hotel in America. A lot of small hotel owners are buying supplies from local Walmart stores too.
I am curious if this is correct: The EU has a population roughly of similar size to that of the US, and the EU had (when it included the UK) an economy roughly the size of the US in terms of GDP (https://www.thebalance.com/world-s-largest-economy-3306044). Is that right? (I just looked this up via Google)
Also, Discussion of Europe's lack of mega companies / weakness is often a theme here, and there are many fair points to be made about its lack of entrepreneur culture and unfriendliness to business. But I'd like to point out that it's worth to think about more than just economies in comparing the EU to the rest of the world. So let me mention a couple of other things worth noting:
Stuff like GDPR or the currently-in-the-works AI act (not to mention all the other rights and wellfare benefits common in much of the EU) don't help the EU's economy but do benefit its citizens in many ways (as far as I am aware).
Sanofi, Nestle, Airbus, Stellantis are not. And those are just the ones I come up woth from top of my head. Germany's strength are actually mid sozed comoanies ezcellong it what they do. And the big obes, is it really a surprise that the biggest EU economy actually has a fair share mega corps?
> EU's economy but do benefit its citizens in many ways (as far as I am aware).
I guess you can easily argue that a stronger economy also is pro-citizen and benefits the people. I have had discussions with close friends in EU and I get the opposite response. They're all in tech aiming to move to CH for better salaries and stronger capitalistic/enterpreneurship environment.
Doesn't Switzerland has a law similar to gdpr? plus as many companies are operating in eea too, they must obey gdpr too
Salaries of course are better (in some Cantons, not all of them)
Most people wanting to move to Switzerland due lower taxes and such tend to ignore the way hogher living costs there, in end what you save in taxes is spent on rent and groceries. Best thing is to work in Switzerland but life across the border in France. Even better, replace Switzerland with Luxembourg and benefit from evil-EU enforced retirement benefits. Added bonus, FANG is offering jobs on Luxbourg, if you want to stay in "tech".
there are other advantages there, like some cantons have really low taxes and not so high renting price, plus there are some ways to use your pension ahead of time, as initial deposit for buying a house. Some do not like living across the border in France due to different reasons (qol, safety) but that totally depends on individual
There are no mega-companies because it is not a single market in practice. Language alone splits your market.
It would be like launching your SV startup only in California and not getting the other 49 states for 'free'. For each new state you launch in, there is regulatory burden and language burden, not to mention culture differences affecting UX. Small markets limit growth and reduce ability to raise capital -> ergo the US competitor will almost always win.
But the US has thousands of different tax jurisdictions. Even US lawyers have difficult time giving fast, proper answers on inter-state tax matters. Law and legal readings change every year. How is the US in practice a single market where you get other states "for free", other than language?
Rising nationalism worldwide is a bane to European prosperity and I don't see that trend reversing. In the latest bout of EUR depreciation, one can interpret Russia's invasion as a nationalist imperative. The prior bout of EUR volatility accompanied Brexit, of course. And over the last decade, the US has been a better investment destination than Europe (probably the case going forward too).
In contrast, many commentators thought London (and Paris to a much lesser extent) would take financial market share away from New York during the aughts, the heyday of globalization. Celebrities like Gisele famously demanded to be paid in EUR, while Jay-Z showed off his Euro notes in the video for "Blue Magic."
It doesn’t really help that the last crisis exposed that Eurozone governance is a headache compared to the relative cohesion of a one-country currency, due to the individual countries butting heads about policy.
The difference is that even when non-Euro countries have different regional leaders butting heads, you still have both fiscal and monetary policy controlled by those elected/appointed from the same country.
To look at the government styles of other major reserve currencies (USD, CNY, JPY), state/provincial/regional governors have little to no impact on monetary or financial policy. Florida doesn't have the ability to veto the FDIC saving a New York bank for political points, the same way Germany was very will-they-won't-they over several major bailouts.
In the grand scheme of global economics, yes, nationalism has a very big impact, and it typically lasts longer than pandemic lockdowns or gas sanctions.
> Rising nationalism worldwide is a bane to European prosperity and I don't see that trend reversing.
Also importantly, the EU's economic raison d'etre ended last quarter.
It was simple: Germany props the EU with transfer payments and EU members commit to buying German goods. Now Germany has a trade deficit. A major exporter-manufacturer has a trade deficit. That's like China having a trade deficit. This is absolutely cataclysmic and an economic fuse of unknown length just got lit on the EU.
And the worst probably isn't even behind us as Brussels continues to self-destruct for the sake of stopping a comic-book villain version of Putin who is apparently an existential threat to the West, but also not powerful enough to even take over Ukraine.
I'm not one for predictions, but unless Brussels comes back to reality and stops dealing with platitudes and the ideas of insulated Davos elites, it's quite likely the EU ceases to exist as we know it within the decade.
> the ideas of _Klaus Schwab_, it's quite likely the EU ceases to exist as we know it within the decade.
EU people gave control to Schwab. Your timeline looks to be correct for EU crack-up caused in part by unpayable pension obligations.
In the meantime, my tourist dollars spend further in Europe this summer.
> [...] Brussels continues to self-destruct for the sake of stopping a comic-book villain version of Putin who is apparently an existential threat to the West, but also not powerful enough to even take over Ukraine.
You might be underestimating how close Vladimir Putin is to a comic book villain. I'd recommend you to take a look at https://meduza.io/en/feature/2022/06/16/the-criminals-in-the... . (Meduza is a reputable Russian journalistic medium, operating in exile from Rīga, Latvia. )
> I'm not one for predictions, but unless Brussels comes back to reality and stops dealing with platitudes and the ideas of insulated Davos elites,
I've noticed from up close how much of the EU structure, especially the EU parliament, is actually very approachable by the ordinary member state citizens it is supposed to serve.
> it's quite likely the EU ceases to exist as we know it within the decade.
The risk certainly seems a lot higher that for the US or Russia. "Quite likely" is a bit of an exaggeration at this point though. I do hope a decent EU will last quite a bit longer. I feel like all recent crises have actually strengthened the EU.
> a comic-book villain version of Putin who is apparently an existential threat to the West, but also not powerful enough to even take over Ukraine.
Russia is more than powerful enough to take over Ukraine on its own. But Western aid to Ukraine — because of the perceived Russian threat — has been enormous. US direct military aid since the major invasion this year being more than Ukraine’s most recent annual defense spending.
A weaker currency is better for exports. So Italy can export cars, or olive oil, and the foreign currency it receives will buy more euros for paying employees, local suppliers, etc.
And it merits stating the obvious: In turn, employees and local suppliers suffer a worse quality of life as their salary loses buying power.
Inflation redistributes wealth from people who earn and save in local currency (lower and middle class most impacted) to benefit those who deal more in foreign currency (upper middle class, rich people).
Any inflation above the stability rate, produced by monetary policy, is government thievery plain and simple. I say this as an exporter who financially benefits from local currency inflation.
Absolutely, that's why it's a silver lining in a very dark cloud. Ordinary folks (myself included) suffer greatly in inflation. The only real beneficiaries are exporters of locally produced goods or services
I think so, given a healthy market. Sometimes fiat decisions or policies can discourage or outright prevent local supply from developing. The key is balance.
If anything, Germany is thought to benefit (some said "unfairly") from the Euro, which is weak for its economy, but strong for other member countries. It allows Germany a competitive advantage when it comes to exports.
But can the EU even scrape together the raw material inputs to produce enough to make up for the trade deficit? Will they be competitive with Chinese exports? Can they implement this strategy given their labor market constraints?
This is not a historic low, but a definitive low. There are several reasons for this.
- in time of a crisis, the world seems to ralley around the dollar, as it is backed by the strongest economy and the strongest military.
- this crisis has hit Europe hard, as it is not only close to the war, but of course, too dependant on Russian oil and especially gas.
- there was a lot of inflation internationally, the US federal bank was the first to raise interest to combat inflation. The EU lags behind and is limited in action due to the fear of destabilizing some of its member countries with too high of a debt.
Consequently, there is a lot of good reason for the Euro to be weak at these times. However, if the energy crisis can be solved and the war contained, a weak Euro also is also pushing exports from the EU. So there is a lot of reason for this trend to be stopped, if not reversed, until the other extreme is reached again.
Europe doesn't just have an energy crisis though, if Russia decides to cut off the gas they straight up have insufficient energy to make it through the winter. The decline in the Euro is pricing in the risk of catastrophic shutdowns of industry across Europe.
All of it a result of moronic politics around nuclear and a failure to build out fossil fuel capacity while the green energy transition was still in progress.
If you started building a nuclear plant ten years ago, it will be finished when the crisis is way over.
Nuclear certainly is crucial in the mix. And used as such: Europe has a lot of nuclear power.
But nuclear is slow. Terribly so. Even an operational plant needs days to react to increasing or decreasing demands. And building such plants from scratch, or extending existing ones, takes decades. Never months.
The Germans are shutting down perfectly serviceable and world-leading (in terms of safety) nuclear reactors purely out of doctrinaire ideology of the Green Party.
I think money, perk and power go a longer way than ideology. There were probably backroom stuffs we didn't know about. It takes a LOT of cash to feul any movement that huge.
Don't you say. Is there also a wikipedia article on how to replace all industrial, commercial and domestic heating infrastructure with those? Europe wide?
Electric radiators are quite cheap (they retail for less than $100), and homes in the cold parts of europe are typically well insulated, and if you bought a radiator for every person in the eu (0.5B * $100) it would cost .3% of europe's gdp ($18 trillion), or 5% of the eu's budget for 1 year. This helps reduce the reliance on gas for domestic heating.
Those heaters heat one room, not a house or appartment complex. They consume a ton of electricity, are higly inefficient and don't heat your water supply. And while they maybe cheap (are those cheap ones rated for contonous usage or are they some cheap Wish knockoffs?) they are not available in sufficient numbers... Seriously, how comes that people fail to realize how complex things around them are, like infrastructure? These things are not like a consumer grade app or some ride share business...
Most of the houses I've seen in Canada are heated using baseboard heaters, they're not exactly uncommon. Efficiency seems fine, and most of Europe doesn't get as cold as Canada during winter.
I'm standing on floor heating at this very moment (off, of course). It uses district heating / hot water, which could be heated by any kind of energy source, including nuclear.
> Those heaters heat one room, not a house or appartment complex.
It’s something I’ve always wondered:
At night, it might be more cost effective to heat a bedroom electrically than an entire household with gas. But that’s a forced air heating issue: you can’t block 75% of a furnace’s airflow and expect it to keep working. Europe usually has boilers and radiators so dialing down heating to just a room is possible.
Or better yet, heat the person with a mattress pad instead of the building air at night.
Not sure where you're getting your facts. I'm sitting in a house with all of these things you claim don't exist, and I'm not an anomaly where I live. My water heater, cooking stove, furnace.. all electric. Most of it installed in the 80's and all original (other than the water heater which has a 10-15 year lifespan).
Electric water heaters and baseboard heaters are common, and extremely efficient. In fact, resistive heaters in the scientific sense (watts in vs. watts out) are the most efficient form of heating.
They're extremely reliable and cheap because of how simple they are.
They may not be _cost effective to run_ in many regions due to high cost of electricity (per watt as compared to gas). But here in BC Canada, resistive elements are extremely common due to relatively cheap power (Hydro in our case). For whole home heating, heat pumps are usually used in new builds because of their advantages, but they're still very tied to the grid and have elements in them for defrosting and the like.
If you scaled up nuclear you'd similarly see prices of electricity drop, and if you have the grid infrastructure (or build it), electric heating (for your home, water, cooking, whatever) becomes pretty attractive.
Sure it exists. My point was that switching from one to the other is the problem. Europe has issues with gett;ng gas and can't switch to electric. If you use electric and run into electricity issues you cannot switch to gas. Even if both solutions are working just fine.
Your comment I replied to claimed electric heaters were inefficient and not available in numbers. I also don't see any mention of existing infrastructure.
Electricity heating does produce a bunch of heat at other places though, and it all comes from work, whereas the gas could only produce maybe 70% as much work if used some other way.
How is this 0% measured? I would think 1 J coming in from the wall making 1 J of heat means 100% efficient.
Yes there are inefficiencies at generation and transportation. But I don't think those are usually counted when talking about the efficiency of a home device. And it certainly won't be enough to bring it down to 0%.
As an illustrative example, you could get the same heating effect by putting the electricity through a computer or other appliance, or by putting the gas through a heat engine to produce electricity which is used inside the home and warming the house with the waste heat.
Hmm, that type of measurement probably works in some situations, but I don't think it works for heating. For example, I don't think that type of measurement would be as useful for comparing resistive heaters to heat pumps.
I know about heating by computer because for the last several years I've heated my apartment solely by mining Ethereum on my computer. The only dedicated heaters that my apartment has are resistive electric heaters built into the walls, so it's better for me to get a little Ethereum plus heat than just heat.
I don't like the framing of thermalizing potential energy being 100% efficient because efficiency as a general concept is the fraction of what you did vs. what you could do. It's incoherent mathematically, poor communication, and inconsistent with the way the word efficiency is used in other contexts in everyday speech. Direct thermalization is the least efficient possible action. It also leads to absurd statements like 'heat pumps are 400% efficient'. This is further exacerbated by the communication not expressing the upper bound in any coherent way (which is about 800-900% by this framing depending on temperature differential).
You could frame it as fraction of the heating that is possible at carnot efficiency, I guess. Ie. the amount of heat you put into your room / the amount of heat you with a perfect machine could at typical temperature differentials.
Then an element would be about 10-15% efficient (as measured at the wall vs. an ideal heat pump) and gas would be...awkward to calculate (I'd have to open up a textbook if not just multiplying max COP and max thermal efficiency of a heat engine), but somewhere in the 20-30% efficient range. Electric including a thermal generator would be in the 8-10% range somewhere.
Electric heat pumps would be around 50-70% by this metric, or in the 25-40% range somewhere if using a thermal generator.
Thinking about it, I like this metric because it really highlights how much more wasteful burning gas to heat a home with electricity is if you're not using the waste heat for something. If you're not using renewable electricity, even heat pumps don't break even if they're not high quality and well maintained.
Really drives home the importance of insulation and good curtains in cold areas.
Edit: looking at absorption heat pumps, they seem to be a little better than my guesstimate. I think they outperform fossil fuel powered electric heat pumps.
Yes, 100% efficient. But a heat pump is over 100% efficient because it pumps in additional heat from outside instead of just using the electricity's heat.
The consumer side is actually a lot more trivial than you are making out. It's also about as efficient as gas (0% at the point of consumption as you are producing heat, with about 40% energy loss on the production side).
Electric heating is about the simplest machine you can possibly make (it's just NiCr wire and a thermostat which is already there), and the cost would almost exclusively be the labour of installation. Even heat pumps (including for water) could be built in relatively short order.
The problem is it would entail quadrupling the electricity generating and transmission infrastructure. This is the hard part that takes decades.
In fact, electric heating was actively discouraged and built back around 1995. It was often being replaced with gas and wood pellets (which also come from Ukraine/Russia).
The German parties advocating a Nuclear exit did so because the Germans wanted them to do so. Nuclear power really wasn't (probably still isn't) popular in Germany.
True. And it was immediately reversed when Merkel's conservative government took over. And then again reversed by the same conservative led government after Fukushima.
The nuclear reactors would have been due for a thorough 10-year check-up in 2019 which was omitted because of the approaching shutdown. So claiming this was "purely out of doctrinaire ideology" seems unreasonable.
This is bullsht and i made an account just to tell you why:
- Large parts of the Uranium are coming from Russia
- Nuclear power is not competitive and nuclear power is very expensive (especially if you conside the costs the government will be left holding the bag on, becuase nuclear power plant companies will spin off their power plants to new companies to go bankrupt once the profiting is done and the cleaning up the nuclear remains starts), no matter how much the pro-nuclear people want to lie about it
- Nuclear power is statistically not dangerous compared to fossil fuels, but not compared to renewables.
- The world's uranium supply is running out. Already since the late 1980s, uranium mines have been unable to meet the world's annual demand. The nuclear industry has so far filled the fuel gap with material from military and civilian stockpiles.
- Nuclear waste is a problem no country except Finnland is anywhere near solving. Germany has been trying to find a permanent nuclear waste storage location since 1999 and have not come closer to finding one since then, because every time the current favorites are revealed the "not in my backyard" screeching starts and local politicials force a restart of the search.
- Many of the world's nuclear power plants are old, because hardly any new ones have been built in ages, because ...
- The construction of nuclear power plants is unbelievably expensive and takes decades, and much of the know-how on how to build nuclear power plants has been lost in europe over the past decades because so few are being built, which drives up the costs even further.
- We still have 7 years of CO2 budget in Germany, so why do some politicians talk about building new ones, although they would only be finished in 20 years at the earliest (and we in DE can't even get the berlin airport built in anything close to the deadline, how long does a nuclear power plant take then ?)
- Budgets for nuclear power plants take budget away from renewables
- We have to change from a centralised to a decentralised grid, nuclear power is a step in the wrong direction
- Nuclear power plants make us dependent on dictators
- Climate change has an impact on reactor operations. With global warming, extreme weather events are on the rise. Unlike renewables, however, nuclear power plants are not adaptable. Rather, their danger increases in our changing climatic conditions.
- Our neighbour france has heavily invested in nuclear power and is is a complete shtshow. There are constant headline to the extend of "Low temperatures caused another french nuclear power plant to go off the grid, worsening the skyrocketing energy prices in france" (The same with "too high temperatures" any many other reasons). Even before the war they had an energy shortage.
The 3 remaining nuclear power plants in germany are:
- Emsland (1335 MW)
- Isar/Ohu 2 (1410 MW)
- Neckarwestheim 2 (1310 MW)
All three are pressurised water reactors and thus not as bad as boiling water reactors, but total rubbish compared to liquid salt reactors.
Moreover, all three have been in operation for over 30 years and all three are due for a "periodic safety review" (every 10 years), which was allowed to be ignored during their last 3 years of operation due to a "grace period under the Atomic Energy Act".
If they were allowed to continue running, the operation time extension of the of all three would start with at least one month downtime, because these inspections would have to be started again. These inspections would most likely also reveal necessary repairs, wich would further delay the timeframe.
By the way, all three power plants have not been employing new staff for some time because they knew the would soon be shut down soon anyway.
In short: these nuclear power plants have been preparing for their shutdown since 2011 and have let everything slide over the last few years because everything will soon be demolished anyway. There are not the necessary...
A nuclear reactor can be built in three years, though admittedly this hasn't happened in Europe. They are mostly (85%) built in under ten years. Figure 3 shows we should expect around 5 years. https://euanmearns.com/how-long-does-it-take-to-build-a-nucl...
>- Large parts of the Uranium are coming from Russia
Not immutable. There are other sources that are much friendlier
>- Nuclear power is not competitive and nuclear power is very expensive (especially if you conside the costs the government will be left holding the bag on, becuase nuclear power plant companies will spin off their power plants to new companies to go bankrupt once the profiting is done and the cleaning up the nuclear remains starts), no matter how much the pro-nuclear people want to lie about it
I doubt this hyperbolic assertion. Prove it.
>- Nuclear power is statistically not dangerous compared to fossil fuels, but not compared to renewables.
Again, prove it. This is unsupported, and in fact from what I've seen, false. So provide some evidence.
>- The world's uranium supply is running out. Already since the late 1980s, uranium mines have been unable to meet the world's annual demand. The nuclear industry has so far filled the fuel gap with material from military and civilian stockpiles.
This is again, an unsourced claim. In fact, a quick google shows: "There is not now, nor has there even been a shortage of uranium. Fear about reliability of the supply of uranium has been used in the past as an excuse to get something else done." Source: https://www.forbes.com/sites/llewellynking/2020/06/08/uraniu...
>- Nuclear waste is a problem no country except Finnland is anywhere near solving. Germany has been trying to find a permanent nuclear waste storage location since 1999 and have not come closer to finding one since then, because every time the current favorites are revealed the "not in my backyard" screeching starts and local politicials force a restart of the search.
I agree this is a problem, but it isn't one that is unsolvable. It's a cultural issue, not a physical one.
>- Many of the world's nuclear power plants are old, because hardly any new ones have been built in ages, because ...
>- The construction of nuclear power plants is unbelievably expensive and takes decades, and much of the know-how on how to build nuclear power plants has been lost in europe over the past decades because so few are being built, which drives up the costs even further.
This isn't inherent, it can change, especially with political need.
>- We still have 7 years of CO2 budget in Germany, so why do some politicians talk about building new ones, although they would only be finished in 20 years at the earliest (and we in DE can't even get the berlin airport built in anything close to the deadline, how long does a nuclear power plant take then ?)
CO2 budgets are now irrelevant currently. China and Russia do not give a shit about CO2 emissions; their energy and GDP are heavily dependent on them. Globalization was the only mechanism that allowed the world to enforce these two countries to behave with emissions, and with the ongoing breakdown of the globalized system, there's no reason they'll reduce emissions. Why cripple Germany's economy to meet a target that the world's largest emitters aren't willing to get anywhere close to?
>- Budgets for nuclear power plants take budget away from renewables
Possible, but renewables have their own downsides, which are well articulated everywhere.
>- We have to change from a centralised to a decentralised grid, nuclear power is a step in the wrong direction
Why?
>- Nuclear power plants make us dependent on dictators
How? How does solar not do the same, in the case of China? 80% of the world's solar panels are made in China, in fact, that rely heavily on the consumption of Coal to produce. Source: fuzzfactor↗
>- Nuclear waste is a problem
I agree this is a problem too, and this is why people point out there is also a physical issue which transcends culture.
In terms of radioactive properties remaining over a period of millennia during which a culture can be expected to have lost its identity, or been forgotten completely.
If the problem is not truly unsolvable, a permanent solution may still not be possible without close co-operation with a future sympathetic culture.
Probably not from Germany, are you? The greens were not part of this decision when it was actually made.
Yes, there was some anti-nuclear sentiment after Fukushima which made for an opportunity. But it was long in the running. Both the SPD and CSU/CDU had interests here. Lots have been written on this in established media, should you wish to delve deeper.
Yes, but the original plan of the Greens seeked to use nuclear power as a transitional technology to first replace coal. While the build up of renewable energy in Germany during the last 2 decades is very impressive, adding more gas to the mix certainly looks idiotic in hindsight. This wasn't the Greens fault, as they haven't been in government since 2005. They are now the ones having to deal with it though.
Yes they were. The decision was made under Schröder/Fischer around 2006.
It was reverted as soon as the CDU took over, and reverted back after Fukushima. But it is originally a "Green" idea and ideology, and it remains to be one today (see: Bavaria trying to get their plants recertified after 2022, because of the gas situation, and Berlin - staunchly Green - fighting it.)
Or just a strong desire that surely somehow this was the green's fault. It's not inconceivable as they have an anti nuclear slant, but this one isn't remotely on them. They do have to deal with the fallout however.
In my book, a party that set up the Atomausstieg, after campaigning on the topic for a decade, after grossly overstating the potential dangers of nuclear, while supporting grassroots anti-nuclear groups and engaging in borderline criminal protests that often endangered nuclear transports doesn't get to play coy once the shit hits the fan in my book.
I think we agree on almost all points, maybe with the exception on the overstated dangers argument. (One should always focus on the good arguments and not the bad, and there are plenty of educated people making coherent arguments without resorting to fear mongering.)
Anyway, don't let this cloud your judgement. There are economic issues here, and economics concerns trumps environmental, in Germany and elsewhere. This would have happened even if no anti nuclear campaigning had ever taken place.
In fact, it might even have happened faster if there wasn't also a big push for renewables, which have taken a lot of resources. The people really responsible should answer for this and not some convenient scapegoats.
I've been hearing the same line about nuclear plants taking decades to be built for decades, as if its a valid dismissal. As the saying goes, the best time to plant a tree was a decade ago, the second best time is now. We should be scaling up our nuclear capacity.
I have read several of those studies with an automated workflow to find suitable pumped hydro/wind/solar and they consistently miss local awareness. They often use deeply inaccurate land cover classification when the simple usage of open street map could have helped, and for hydro they underestimate the recent local opposition to destroy a village to build a dam.
There's a lot of low hanging fruit in the hydro landscape that people miss.
I have a rivulet that runs near my house. It has weir dams at a few locations on it's path down our mountain, IT wouldn't be that hard to extract energy from the constant flowing water there to feed into the grid. There are turbines that exist to extract energy from a meter high head of water.
Everyone thinks about power like you need one big dam, or one big plant (coal or otherwise). There's a lot of small fast flowing streams that have potential to create extra energy.
I think hydro needs to be reimagined. IT always need to flood valleys to be in the mix.
That really depends on what percentage of water's potential energy is expended in small creeks and the like vs big rivers.
I actually have no idea how to estimate that. Anyone have a good estimate on that? Intuitively, I'm thinking that most of those rivers are fed by many small streams, so it would be approximately equal. I'm entirely unsure of that though so treat it as having huge error bars.
The problem becomes one of how spread out the energy is.
Sure the water in that creek might be falling hundreds of meters, or even kilometers, but without a dam the height differential at your generator is only going to he a few metres at best. Enough to power the lighting, fridge, and washing machine in the houses that the creeks happen to run by, but not much else.
With the advent of long lasting perovskites and (hopefully) some less polluting battery technologies you're not even better off cost-wise.
You might be able to do something with a long pipe parallel to the creek to get more head, but then you're going to spend a lot of your energy on wall friction unless it's very wide.
> Sure the water in that creek might be falling hundreds of meters, or even kilometers, but without a dam the height differential at your generator is only going to he a few metres at best. Enough to power the lighting, fridge, and washing machine in the houses that the creeks happen to run by, but not much else.
Could be, but that's a bunch of stuff you don't have to power with the existing system. Given how many creeks there are, that seems like it could really add up.
> With the advent of long lasting perovskites and (hopefully) some less polluting battery technologies you're not even better off cost-wise.
That's fair. I've learned in my life that I don't have a good intuition for what the costs of large infrastructure projects are.
Yeah in this example, the water is never stopped. Not even the flow rate, It's just held back for a moment to create a convenient potential energy situation.
This https://www.youtube.com/watch?v=Bhyi1DjGti8 Is something that could be built near a bus stop near my house and not negatively impact anyone outside of the initial construction.
Who is going to run all the little dams and turbines, though? And how would it ever be cost effective to do so? There is so much maintenance on small lakes that don’t even have a turbine (mainly dealing with silt, which accumulates steadily and is hugely expensive to remove).
Pumped storage is hard because you need a lot of space on a hill for a reservoir. Perhaps we can turn lake mead into a giant pumped storage project with a bunch of solar installed over it to limit evaporation. Then use wind, solar, or even nuclear to fill it (but that’s a lot of water that farmers might want for their fields, again, limiting evaporation is important).
A few example large solar plants in the US seems to have ~500MW capacity, ~30% capacity factor (so ~200MW effective capacity), and taken 2-5 years to build [1][2][3].
A nuclear plant will probably have multiple 1GW reactors, with very high capacity factors. I think your numbers are very optimistic.
Building a nuclear power plant today is assuming storage for solar and wind will not be figured out within 50 years, allowing you to sell electricity at todays price for at least this time. You can see why no one wants to take that bet. It's over, it was already over 10 years ago, stop trying to fit every crisis around a "nuclear was unfairly maligned" obsession.
Any effort spent building nuclear for the 2040s is effort that could build 5x as much solar and wind for 2025.
Plus transitioning to nuclear just builds another set of kochs and saudis.
Plus it makes your entire economy beholden to one of China, Russia, France, or the US.
Plus it just kicks the can down the road. If you consider direct thermal forcing. We are exactly where we were in the late 19th century with greenhouse gases. There is no option but to transition to a steady state economy, and starting a bunch of projects that only pay off if you use as much energy as possible from them (and even then, solar + storage will be a fraction of the cost by the time they open) isn't the way to get there.
Plus those same five countries won't even let half the world have nuclear power plants.
Plus the world's uranium reserves won't actually last very long if you carry on with exponential growth (doubly so without reprocessing and breeding).
Then there's all the usual risks people mention.
The solution is the same as it has ever been. Degrowth, stopping waste, and renewables.
Solar and wind are nice, but they don't solve the base load problem. They aren't consistent enough to operate as base load on a power grid. They are certainly convenient for maintaining peak load, but without solving the energy storage issue in parallel to the added capacity, we need alternatives.
Then comes storage, curtailment, and backup (always necessary: fossil-fuel plants always produce around 9% of electricity in fully-nuclearized France).
Moreover backup is now provided thanks to gas turbines, and we know to run them thanks to hydrogen (clean), which can be green hydrogen (cleanly produced thanks to renewable sources overproduction).
There is no need for each location to deploy each and every type of production unit: each region has its own geography and preferences.
Those benefiting from huge potential for hydro, offshore wind or solar (deserts...) are at an advantage.
Those benefiting from a low production time-profile correlation with most other ones also are blessed.
Those totally unable to deploy anything probably don't need huge amounts of energy or are rich to the point of already importing it (is there a counter-example?).
If Europe can continue to buy cheap Russian gas and oil and use it as they have done in the past then 5x as much solar and wind for 2025 sounds great. That was the Great Plan of the green movement in Germany. In 2010, 2020, 2030, 2040, 2050 or a time after that green hydrogen will become cheaper than Russian gas and oil and then this plan will be completed.
If however Europe can't continue to burn gas and oil when demand exceeds supply because of the weather, then there is a major problem that is going to need fixing in a very expensive and time consuming way. If green hydrogen don't drop in price and no other storage solution can arrive to become cheap than gas and oil, then the climate change goals won't be achieved.
To add to the problem in northern Europe, the locations for hydropower is practically already at maxed utilization. They are also quite old and with large maintenance debts. They are also is causing extinction of several species, and fixing that would cost prohibitively much money, and the solutions will reduce outputs.
The thing is, 5x solar and wind sounds great but if I can specific the time and space for it, I would make a great profit of trading 5 units of energy for 1x at a different space and time. The price difference in northern Europe can be a factor of 10 or even higher between low and high. 5 kwh worth 3 cent each is worth much less than 1 kwh worth 40 cent.
As others already pointed out, the nuclear exit strategy was decided upon under Merkel's conservative government.
Some added information so: The Green party pushed for an exit of nuclear power as part of a social-docrat government. This exit eas actually pretty well worked out and planned. When Merkel took, one of the forst things was to throw that rather good plan out. Only to revert that decision, hastly at that, after Fukushima. That second nuclear exit, the one Germany is currrently going through, was hastly done, ill planned and rushed.
And lastly, nuclear power does exactly nothing to compensate for reduced gas deliveries. Germany, as in deed a good portion of Europe, is heating with gas. And not nuclear power or electrical.
It's only slow because of ridiculous and unnescessary regulations around it. They can easily speed things up while still keeping it safe, but their (and our/US's) laws are kicking themselves in the butt.
In Western Europe (in a political meaning) only Finland has tried for several decades. It's now 12 years behind schedule and the official message is that it will be running in winter (colder in Finland than in many othe places) when the lack of Russian energy will become most visible. Direct import of electricity and gas from Russia have been already stopped. At the moment that's not a problem because it's summer and you can import from other European countries. I'd be very suprised if you can do that in winter. If the nuclear power plant is not ready people will sit in the cold in 6 months from now. Or they will compromise on safety and just run the plant anyway. It is already loaded. No idea what will happen, but I should stop discussing on HN and order firewood.
I think more so the precedent it set. Not switching on ~and~ not growing nuclear. It wouldn't be too ridiculous for Germany to be producing 30GW from nuclear by now. That's a 22GW spread from what it is today which isn't negligible.
But yeah, people are definitely being a little over dramatic on the severity.
Can’t heat with nuclear. Not in a way that’s relevant for this, anyway.
Heat is the main challenge and heating alone is problematic all by itself.
Gas dependence was a huge mistake, nuclear is not the short term solution we are looking for and getting away from gas dependence in the past couldn’t have relied on nuclear.
Domestic heating is done, mostly, by gas. Hard to replace all of Germany's (or Europes) domestic heating infrastructure with electric heating in couple of years. Not to speak about monts.
So no, nuclear power cannot be used for heating and Europe definitely doesn't have an electricity problem.
You don't seeem to uave an idea how domestic heating works in most oarts of Europe, do you? And that simple plug in heater will consume so much electricity that your gas heating would still be cheaper. Also, that wall heater doesn't heat your water supply...
Edit: Assuming a plug in wall-heater does all of that, just how many of them would you need by November this year to change something?
2. Hmm, looks like sometimes they explode in a pretty rude, nukey way. Maybe we should stick with coal, oil, and gas.
3. Yikes, climate change. But if we pull all our coal/oil/gas plants down we won't have enough energy and prices will skyrocket. Not enough wind/solar/hydro yet.
4. So... maybe nuclear is a good idea again? Cheap electricity?
We're here. So your argument is we can't use nuclear because electricity is too expensive in Europe, when the whole idea is to increase the supply of electricity and thus bring down the price?
> Also, that wall heater doesn't heat your water supply
There are electric water heaters.
> how many of them would you need by November this year to change something
Maybe someone in this thread is arguing that we can both build a bunch of nuclear plants and distribute electrical heaters to people in ~4 months, but I'm not. This is all a long term thing isn't it? Don't we have to do this anyway for green energy?
No idea why the concept of energy, in the scope of a national ecobomy, is so hard to understand. Of course you can heat with electricity, in the case of heat pumps even sustainable. Thing is, there are millions of house holds, commercial and industrial users that have decades of infrastructure in place heating with gas. No way to replace that in mid, let alone short term.
Also, nobody will freeze to death in his house over this.
> No idea why the concept of energy, in the scope of a national ecobomy, is so hard to understand.
Please don't condescend! I agree this is a big job.
> Of course you can heat with electricity, in the case of heat pumps even sustainable. Thing is, there are millions of house holds, commercial and industrial users that have decades of infrastructure in place heating with gas. No way to replace that in mid, let alone short term.
Again we agree. My point is that we have to electrify for green energy anyway. May as well do it, right? Is your argument that we should only ever heat with gas, and electrification is a waste of time and money? Is there enough gas to do that?
> Also, nobody will freeze to death in his house over this.
The thing you're referring to is someone saying "In an emergency situation (a matter of life and death for the vulnerable)". Isn't it reasonable to consider this scenario? Why is it FUD?
Maybe if you want to heat a subset of rooms for the cost of heating the whole house.
Electric heaters are extremely expensive to run relative to gas or heat pumps.
Heat pumps are great and extremely efficient, but not they are as hard to install as air conditioners (because they are air conditioners that work in reverse).
I believe there are models of window units with heaters available though they may just be doing resistive heating. I've seen plenty of mini-splits running as heaters obviously using heat pumps and they seem to work quite well.
Windows here in Europe don't usually slide. And in Europe we like looking out of them :)
But heat pumps are also available in single units now. They're getting quite popular because they can be self installed (no refrigerant engineer necessary).
In "emergency situations", there is this crazy modern technology called "blankets" and "jackets" and "coats".
Home heating is primarily a luxury for comfort, not survival. Given sufficient insulation, we generate enough heat from food to muddle through.
Is it fun to shiver under blankets during an energy crisis? No, not at all. But are people going to die? Not likely, assuming access to space alien technology like blankets and coats.
> The most recent data on fuel poverty in England indicates that there were 2.28 million
fuel-poor households in 2012. 5. Cold homes can affect or exacerbate a range of health problems including respiratory problems, circulatory problems and increased risk of poor mental health. Estimates suggest that some 10% of excess winter deaths are directly attributable to fuel poverty and a fifth of excess winter deaths are attributable to the coldest quarter of homes. 6. Cold homes can also affect wider determinants of health, such as educational performance among children and young people, as well as work absences
This whole comment tree seems to be full of people who deliberately misunderstand physics and economics.
Europe is still going to have access to gas if Russia cuts its whole supply come winter -- in fact, 60% of the European gas supply will still be present. Probably a bit more, since lots of crisis efforts have been made to provide gas from other sources. Only part of the heating needs have to be replaced.
Let's say Germany still had the, what, 8000 gigawatts of nuclear power online that it has shut down during the last decade? Wild-ass guess, but it's a lot. That's base load, of course. Electric power.
Resistive heating is dirt cheap to deploy in terms of capital costs. You can buy a 2000W heater for $20, perfect for domestic use. So the operating costs dominate. Using a heat pump is 3-4 times better in terms of operating costs; that's not as easy to deploy but many places will already have A/C installed and that's usually the same thing.
So then it becomes a question of economics; many industrial processes cannot be replaced with electricity. But as we've seen, heating of living spaces can easily be done with electricity.
So in the kind of crisis we're discussing here, those thousands of gigawatts of nuclear electricity would be pretty damn useful for emergency heating of German homes and businesses, during months where the gas would be more profitably used for the industrial processes that require it.
It sure as hell wouldn't have been cheap, but it would be cheaper than shutting down half the economy, which is what we're preparing for right now.
It's a moot point, of course, because those ~17 nuclear plants are already shut down. But it would very much have made the issue dramatically less painful.
Umm... I'm looking at https://www.ercot.com/ and for all of Texas (if memory serves we're twice the landmass of Germany and probably on par by population) on one of the hottest days of the year, we've got about 84,000 megawatts of capacity. I think you're off by a couple orders of magnitude when talking about thousands of gigawatts.
According to Reuters, I was off by a factor of two, if the number they quoted counts all the plants they decided to shut down. ~4000 GW shut down. That’s a decent wild-ass guess, IMHO.
Yeah, I don't think Reuters is correct here. Everything I'm seeing is that a nuclear plant produces around 1 gigawatt, so we'd be talking about thousands of nuclear plants.
Also probably helpful to think about it on a per person basis. Another comment corrected me that Germany has 80 million people, so let's use that. 8000 gigawatts (8 terawatts) divided by 80 million looks like 8,000,000,000,000 watts / 80,000,000 persons gives you 100,000 watts per person which does not seem realistic. With my air conditioner running at full blast, that's probably just a couple kilowatts, and that covers 3 people. Lights use a few watts. A beefy computer is around 100 watts.
It's possible that Reuters got gigawatts and gigawatt hours confused.
Ah, that's a very fair napkin calculation, the 4000GW number is obviously wrong.
But I don't think it ruins the core of my argument; it wasn't hinging on Germany having reduced their annual power production by 99%. If Germany in fact shut down 15GW of nuclear production (15 plants), that's still on the order of 200 watts for every person in Germany, or one new 1000W resistive heater running 24/7 for every fifth household.
That's the kind of "on the margins" capacity that would indeed make a Russian gas embargo dramatically less painful.
rather because a recent change in the energy code allow to count neighbor firm capacities into the adequacy requirement and the usage of monte carlo methods for adequacy requirement.
This is an important point that quickly gets lost in a simplified debate.
Different types of power have different characteristics. Nuclear power plants runs at constant load and changes in power are slow. They take on the order of days to start and stop, and can not on their own follow load changes on a country wide network.
This isn't good or bad, it just is. They can manage the same base load day every day until they need servicing. But that also means you need other power sources to take the top load. That's usually natural gas turbines, even if it could be other things. Hydro is optimal, but most countries have a limited capacity for that. Which is, somewhat ironically, a similar situation as wind and solar have, but for completely different reasons.
Keep that in mind when people talk about replacing natural gas with nuclear. They do different things.
This mostly isn't physics, but rather a reflection of nuclear power's high capital costs. Nuclear plants have demonstrated that they can ramp up and down pretty quickly compared to e.g. most combined cycle natural gas plants.
"For example, according to
the current version of the European Utilities Requirements (EUR) the NPP must at least be capable of daily
load cycling operation between 50% and 100 % of its rated power Pr
, with a rate of change of electric
output of 3-5% of Pr per minute. " - it goes on to discuss how most modern light water plants significantly outperform this requirement.
"Most of the modern designs implement even higher manoeuvrability capabilities, with the possibility
of planned and unplanned load-following in a wide power range and with ramps of 5% Pr per minute.
Some designs are capable of extremely fast power modulations in the frequency regulation mode with
ramps of several percent of the rated power per second, but in a narrow band around the rated power level. "
> Keep that in mind when people talk about replacing natural gas with nuclear. They do different things.
Having some nuclear base load certainly helps, though, if natural gas is disrupted. Instead of having both the dispatchable power and variable power impacted from reduced natural gas supply, you instead only have a portion impacted.
One strategy is to build a bunch of renewable for during the day. Add some nuclear base load. And then with the surplus power you get sometimes, do power-to-gas with electrolyzer cells. Finally, use natural gas peaker plants and burn natural gas where justified in industry. This is a nice diverse mix with storage.
Solar and wind are also inflexible (they generate when sun and wind are out, not on demand). In addition to hydro, natural gas is on demand, which is why we’ve shifted a lot of generating capacity to it. But that makes Europe dependent on Russia and contributes green house gases even if it doesn’t emit much air pollution.
Hydro is even better, you can modify some dam, then pump water back before the dam, storing energy for later usage which make a very cheap energy storage.
Yes, last winter France imported a lot, because more than 4 reactors were shut down for maintenance due to corrosions problems that has been found.
These problem should had been found earlier, and would allowed to make the maintenance before the winter, but due to covid, inspections have been postponed.
For example, 01/11/20 to 26/12/20 (their website allow only 8 weeks period graph) you can see that overall France exported a lot of electricity to other EU countries in the middle of the winter.
> Can’t heat with nuclear. Not in a way that’s relevant for this, anyway.
That is not a law of Physics. Electric heating is perfectly fine. It’s true that we cannot do it quick enough to matter in this case, but that is not a good reason to just shrug and not learn anything from this. We will need a long-term strategy, because even if we manage to come up with a temporary solution, it’s clear that these things will happen again in the future. It’s just too good as a way of applying pressure on European countries. Long term, it will have to be electric if we want to improve our energy supply and have a remote chance of not staying too far from our climate goals.
We should have seen this coming for quite a while. It was in fact predicted, but mostly ignored by politicians who seemed to thing that oil crises from the 1970s were fun and that energy independence was irrelevant.
No. The gas is needed for heating homes and industial uses and that was already the case when Germany was using its peak nuclear power. Keeping the nuclear reactors would be almost no help with the current problem because Germany is using almost no gas for electricity.
And if you build more people will die in the next big accident. There is no doubt that there will be a next accident. For Chernobyl you can say criminal neglect was part of the system in the USSR. 3 Mile Island happenend in the world leader in technology. Japan used to have the reputation of having high security standards. Until Fukushima happened and they did not have the situation under control. There will always something fail, regardless how well it's designed. Not necessarily this year or not even in 5. But most of us still intend to live for decades, I'd assume.
If a Jumbo crashes you expect around 400 death. If 2 crash into each other it's twice as many (search for Tenerife if you are too young to remember). If you build 2 skyscrapers for 16,000 employees you risk 16,000 deaths if the worst happens ("Less" than 3000 died, so the cold facts aren't that bad after all.) If you build build a nuclear power station with millions of people around, you risk many more deaths. Not everyone of them immediately, but cancers caused by radiation will continue for decades. Building such things is engineer hubris and some day something worse than what we have seen so far will happen.
3 Mile Island has not killed anybody AFAIK, but it showed the the world's leading tech nation failed completely in responding to the accident. Some facts could be found only years later when the reactor could be inspected and others will remain in the dark forever because they just could not be collected in time. You want to trust a technology where even accidents without fatalities cannot be investigated?
For Chernobyl the overall death toll is estimated between 50 and 4000. Nobody knows and nobody knows how to even count. How do you count the disabled and sick babies born after it?
For Fukushima 1600 fatalities were reported during evacution. I am not an expert, but I guess it's difficult to attribute because the whole area was devastated already by the tsunami.
There will be lucky outcomes also in the future. But if you have hundreds of thousands or millions of people around, some day we'll be out of luck.
So your nuclear power caused death count over 4 decades is roughly 5000 people? I think we killed more people than that trying to make a non stick pan.
Fossil fuel burning pollution kills millions every year even with no accidents.[1]
> "If you build build a nuclear power station with millions of people around, you risk many more deaths."
Don't build it near millions of people. See this map of the UK[2]; London, Birmingham, Liverpool, Sheffield are where the most people are, and where the nuclear power plants aren't.
Anyone a bit better informed would be skeptical and the arguments are on the table for years now. The gas problem is about heating which nuclear energy could only supply indirectly with a low grade of efficiency. Germany, for example, only ever had 6% nuclear energy at its height. You can pretty clearly identify populists that now propose to change course. It would minimally easy the burden, perhaps, but there are more efficient alternatives.
"People will die" from this mistake is hysteria. Nobody informed about the energy problems will take that seriously. Gas is not electrical power to start with.
How can it not? Unless things can reverse fast (ie imported energy capacity that has left returns overnight) European home heating costs will skyrocket this winter. The average household will look for someone to blame.
They weren’t in charge of energy policy. In Germany for the last 16 years. They had completely different policy ideas to what was actually implemented.
Blaming the greens is internationally some kind of dumb idea that likes to reduce politics to stereotypes. The real effects will be much more subtle and indirect.
Could still end up with the greens losing votes. Currently it doesn’t look that way at all. (German perspective here.)
In Finland, the Greens actively and vocally opposed nuclear power at least up until recent years. They abdicated themselves from a coalition government in the early 2000's over that government's decision to grant a license for constructing an additional reactor at an existing plant. Rejecting nuclear power was definitely a visible part of their ideology. That part of the stereotype was actually true for a long time.
I don't know about Germany, but it is my impression that opposition to nuclear power was a common theme among the green movement in general for decades.
Obviously their agenda also included investing in renewables, as well as reducing consumption, but that wasn't going to happen fast enough, either for political or technological reasons.
I have voted for the local Greens several times over the last couple of decades even though I disagreed with and was frustrated with the views they held on nuclear power until recently.
I'm also unfortunately familiar with many of the common and overblown negative stereotypes towards the greens in general.
Insofar as nuclear power could have played a part in reducing our dependency on fossil fuels over the lasts couple of decades, though, I don't think it's unfair to say the greens in many countries did a lot to hinder that.
Electric energy =|= thermal energy. Nuclear energy solves the electricity part (which doesn't pose any issue at all), while doing nothing to aolve the thermal energy question. No idea why people, on HN of all places on the internet, fail to realize that simple fact...
My argument is that nuclear is a different of energy compared to gas when used for heating. Sonce gas for heating is the tipic at hand, this distinction is quite important. And nowhere did I mention price. I talked about how converting electricity to heat is highly inefficient and will cost nore to heat the same building than gas. Nuclear only factors into that as much as it factors into a given electrical energy generatuon mix.
Nuclear energy does not solve the heating part only because most of the existing nuclear plants have not been designed to provide heating, where gas heating was already in use.
There are many parts in Europe where the homes are not heated by gas, but by the waste heat from the local power plants, regardless whether they are gas-based, coal-based or nuclear.
Any existing nuclear plant could be converted to also provide heating for the nearby houses, if the infrastructure of plumbing for the transport of hot water would be built.
However, the last part of the heating infrastructure, where the hot water pipes would have to be passed through the house walls and through the walls of all rooms, would be extremely costly in comparison with an electric heater, even if the operating cost would be lower.
So it is very unlikely that such a conversion would ever be done to already existing houses, even if it is possible.
Heat pumps would have much lower installation costs, while still being more efficient than resistive heaters.
Increasing renewable energy sources and moving away from locally sourced fossil fuels and nuclear power have always been among the main policy proposals of Green parties.
Green parties did not win that much direct power, but they totally won the energy debate and their policies have become the mainstream consensus among European elites.
Over the past years, European governments (not just the German one) have been busy closing down any energy source that was not renewable or relied on imports from other countries.
Now it turns out that renewable energy sources are still not able to cover the basic needs of the population and the economy, and the dependence on imported fossil fuels has allowed an authoritarian government to launch the largest war on European soil since the World Wars.
I don't know if Green parties will actually face a backslash, but it seems clear that the energy transition in Europe will end up making the continent poorer and far less secure in exchange for little, if any, actual benefit for the environment.
> Over the past years, European governments (not just the German one) have been busy closing down any energy source that was not renewable or relied on imports from other countries.
That's just a typo. They tried to stop local non-renewable resources, only to end up having to import them from other countries at a higher price and with a larger environmental impact.
The German Green (Grüne) party is up in recent polls[0]. They are not just part of the German government coalition, with the posts of Secretary of Economy and Energy (Habeck) and Foreign Secretary (aka Secretary of State, Baerbock) (and some other posts), they are very powerful within the government coalition. Both Habeck and Baerbock are leading Chancellor Scholz of the SPD in polls since months.
It has to be said tho that the Green party is doing "realpolitik" now. While they aim at one hand to drastically accelerate renewables, right now they also invest heavily in getting a more secure energy situation in the near future still using a lot of fossil fuels, including rapidly building up LNG terminals and securing deals with parties they previously frowned upon, e.g. a gas deal with Qatar, the government of which the Green party previously heavily criticized for the human rights situation in the country. And e.g. they accepted - with some bickering - the temporary gas (as in petrol) price subventions the other coalition parties wanted, in exchange for temporary public transport price subventions (a 9-Euro regional ticket, that is valid for a month at a time, 21M sold by July 1, population 83M).
They are still rejecting nuclear power generation, neither wanting to build new plants, nor keeping old plants running (the operators of said old plants already called the idea of keeping those plants running "infeasible" to outright "stupid").
It remains to be seen what the blowback will be if inflation doesn't at least slow down, or if autumn and winter come and people start getting cold. Tho right now, the politicians and leading experts and "experts" say, it doesn't look like there there will be a shortage on a scale that gets life-threatening to some people.
[0] 20-24% share in recent polls, vs the 14.8% they actually got in the last election in Sep 2021. They are actually slightly ahead of the SPD (social democrats) in the polls now. The SPD is the majority partner in the coalition.
Not really. Short term the German nuclear plants cannot be kept operational any longer. While fossils are bad, they are less bad than having none and getting old buclear planta ready when they are not needed anymore. Also, the fossil plants are there, and this cheaper to ramp up. Mid term, the goal seems to be renewables.
All in all, quite reasonable and well thought through under the current circumstances.
Effectively the only option they got. Nuclear is gone thanks to the Green party but also Merkel's CDU - who reversed the nuclear exit at first, thereby fucking up planning and investments into renewables, and then reversed that reversal after Fukushima.
The current government that has the Greens as a major coalition partner isn't really investing in new fossil fuel stuff, but replacements of existing fossil fuel stuff. E.g. the LNG terminals are meant to replace the capacity lost from ceased imports from Russia.
Building nuclear now isn't really an option anyway, at least not to deal with the current situation.
The operators of nuclear plants already signaled that running their plants longer is not an option. That would require a lot of investment, and more importantly a lot of time to renovate, modernize and re-certify these things. An effort I believe they said was in the range of 3 or more years.
Building entirely new plants, even with existing designs, would require at least 4 years even on a very expedited schedule.
So in the short term the only option is to keep using fossils - sourced from some place not-Russia. The Greens, while they certainly do not like that, understood this.
Would we Germans be better off if we had some nuclear plants left? Sure. But we'd also be better off if we instead had that energy mix that the Greens envisioned at the start of the century, that entailed renewables at the core, a bit of carbon (mostly from renewable sources, with tech to make it more or less carbon-neutral in totality) and storage, and investments (driven by government incentives) to use less energy in the first place.
If I had to blame anybody, it would be the 16 years of Merkel governments which managed to fuck up both nuclear and renewables, not the Green party.
No, they have warned about a situation like we have it now for decades and were ignored by the conservatives and social democrats for the last 16 years.
They were right all along and are now the ones fixing the situation, after only recently being voted into government.
The polls show:
The two most popular politicians in germany are both greens.
They are the second biggest party in current polls with 22%, 6% behind the biggest party.
In the polls they are the biggest party in the current government (when the current term started a few months ago they were the second biggest party in the current government)
Things are going great for them and there are no signs of that changing.
> if Russia decides to cut off the gas they straight up have insufficient energy to make it through the winter.
I agree with your sentiment on massive incompetence regarding Energy policy but this is an exageration.
1. Russia won't cut off gas despite it's threats because gas is quite literally one of the few revenue sources for the Russian economy. Much like Qatar, Russia would implode without Gas money.
2. There are plenty of other gas providers Qatar, Norway, Algeria, even US/Canada LNG, who can sell to the EU.
What they likely won't sell is at the cost of Russian gas which is the pressing point for Central and Eastern European countries.
But the point is, you would shut down heavy industry and go into deficit before you were faced with a doomsday scenario of people freezing during winter.
Shutting down heavy industry is already a doomsday scenario. That would imply millions of people out of work and billions if not trillions of dollars of lost GDP.
> Russia would implode without Gas money
Russia can sell to China and India. US/CAN has insufficient LNG transport capacity to completely replace pipelines from Russia. Germany has insufficient import terminal capacity.
Yes, they wouldn't run out of gas, but the price would likely spike 5-10x and crater the EU economy which is equally as bad.
Last time this happened, during the financial crisis in 2008, Germany recovered remarkably fast. China is doing it due to lockdowns. Shutting some gas hungry indistries down over winter isn't ahlf as bad as it sounds.
That is not quite correct. First of all, Russia cannot simply sell to China and India. It takes years to build the necessary infrastructure to do that.
Regarding import terminals: there are LNG terminals all over Europe that are far from their full capacity which all have connections to the German net. That alone would suffice in delivering enough LNG. Apart from that, we're on the fast track of having extra terminals ready by autumn.
Also price spikes as massive as those you mentioned will be prevented by emergency government regulation of the market (already announced).
As someone who works in the industry, I have a lot of confidence stating that we will be fine, thank you.
>Russia won't cut off gas despite it's threats because gas is quite literally one of the few revenue sources for the Russian economy. Much like Qatar, Russia would implode without Gas money.
Russia literally shut down Nordstream today for at least 10 days.
Getting paid for gas in Euros or dollars they can't spend is worse than not selling it.
Planned maintenance announced with less than 1 week notice and within days of Putin doubling down on Ruble demands.
It is also worth noting that Gazprom has already stopped supplying gas to countries and companies refusing to bow to the rubles demand—Poland, Bulgaria, Finland, as well as some customers in the Netherlands, Denmark, and Germany.
Not sure the FX market is pricing that catastrophic risk and not simply low rates and high inflation. Why would only the FX market price it and not equities or German government bonds or vol markets?
Also, when markets generally go down, equity and FX positions are the first to be liquidated to shore up cash.
German companies have manufacturing presence all over the world, including substantial factories in the US. Those factories pay workers in dollars and sell products in dollars. They are somewhat isolated from the impacts of the EU failures.
German govt bonds are still being purchased by the ECB under QE so it makes sense their yields are suppressed.
Let me phrase it differently: I don't see the need to invoke catastrophic risk to explain current FX moves. I would expect a tail event inferred from vol markets to start with.
Trump was basically a clown saying different things for different audiences.
He said that we should be more friendly with Russia and that Russia has been trated unfairly. And then said we should buy more gas and oil from the U.S. What do you make of that? Why would you buy LNG from the U.S if Russia is such a great friend and its gas pipes are nearby?
Then went at great lengths to say how Europe is the biggest foe for the United States and not Russia.
Not to mention that fiasco at the Helsinky summit. If you talk a lot of nonsese people stop treating you seriously.
If I remember right he fancied NK leader as well. Just a clown or showmen or whatever you want to call him but definitly a reliable adviser.
Germany has been warned about its dependency on Russian gas by its EU neighbours and past U.S administrations long before that clown. It's just that Germany thought Russia is not completely stupid and made a risky and bad bet. Now it has to pay. It may be for the better because now it can invest in more renewables(i.e has a cleaner slate)
While the strategy to let Russia sit on the table of grown ups did not work out in the end, I think it delayed Putins actions for a few years. I think Ukraine has much better chances than 5 years ago. And without the pandemic, it might have worked longer.
I would entertain the possibility that improving or maintaining the existing standards of living is not a policy objective of most representative governments or their key donors.
A lot of people who wonder why the US is so seemingly subservient to SA (vs other Middle East countries) don’t know about this:
* In 1974, Washington and Riyadh struck a deal by which Saudi Arabia could buy US treasury bills before they were auctioned. In return, Saudi Arabia would sell its oil in dollars—not only enlarging the currency's liquidity but also using those dollars to buy US debt and products.*
So in exchange to gaining access to US treasuries (debt) before action, they had to buy US treasuries? How is that a concession made by the KSA if that’s what they wanted in the first place?
You mean Libya that was bombarded by France and other European militaries with relatively small US involvement? The same Libya that bombed planes[0][1], killed people in front of embassies[2], helped prop up monsters like Idi-Amin[2], waged war against Chad[4] and Egypt[5] and suggested breaking up Switzerland because dictators son brutalized his servants[6]?
The country which was in midst of protests which their government, dictatorial btw, decided to violently suppress?[7]
Yeah, nice guy all around that Gaddaffi. Oils the only reason anybody would want him gone.
>> * In 1974, Washington and Riyadh struck a deal by which Saudi Arabia could buy US treasury bills before they were auctioned. In return, Saudi Arabia would sell its oil in dollars—not only enlarging the currency's liquidity but also using those dollars to buy US debt and products.*
> So in exchange to gaining access to US treasuries (debt) before action, they had to buy US treasuries?
I have no knowledge about this besides what's been written in this thread, but I assume that having the ability to buy before the auction means they get a good deal.
SA gets a good deal on treasuries (basically a bribe) in order to sell oil in dollars and then use those dollars to buy treasuries.
US forces nearly all countries to buy USD that eventually get returned as SA-owned debt (huge monetary policy benefits). SA gets more or less bribed by the worlds largest military.
Awkwardness is when SA wants to do stuff that’s is against US morals (like murdering journalists) or when China firmly but politely asks to buy in RMB (like it has recently).
US generally sees petrodollar regime as second only to the military (as evidenced by their eagerness to invade Iraq and gain leverage over SA).
> it had to invade libya and iraq to stop them from selling oil in other currencies
Sounds like a propaganda meme, at least for Iraq that I know a little about.
Iraq was invaded for failure to fulfill WMD disarmament requirements, which was known and very _legal_ reason for invasion, according to the agreement made after Desert Storm. Iraq not just failed to prove that it destroyed all WMDs and precursors, it actively and blatantly prevented UN investigations, which is documented in UN resolutions in 1992, 1995, 1996, 1998 and 2002.
Note it's not just US, those are UN resolutions.
The propaganda meme keeps floating around because UN weren't able to find WMD after invasion, but the point is that the reason was not whether they find or not. It was Iraq's responsibility to provide proofs of WMD destruction, but instead they actively interfered with that. Who knows, maybe there are still WMD stockpiles, hidden somewhere in the vast country.
I do dislike this aspect of modern Britishness. Yes, be modest, be understated, don't exaggerate or boast about the nation. Yes, some poor decisions have been made by the people and the politicians - where isn't this true?
But the flagellatory "everything is terrible and we are merely worms" attitude that prevails among the bien-pensant class right now is so saddening. The UK does have an influence on the world, a pretty outsized one at that, because it is one of the larger and more modern economies. Ahead of it are the US, the world's two most populous nations (China, India), and two comparative economic powerhouses, Germany and Japan. That's it. If you want to count the EU as one economy, great, it takes Germany's place.
Does this mean where Britain goes all must follow? No, of course not. But neither does it mean total insignificance.
Correct, but they are not raising rates as aggressively as the US. Powell was not afraid to do 75bps, while the BoE is already giving out dovish signals after a 25bps hike last month.
The Bank of England has since then dropped the ball though, sticking to a slow schedule of raises that seem to have endangered the value of the pound further, falling behind the action taken by other nations and sticking to tiny increases.
Couple that with their slow-ish response speed, because the monetary policy committee only meets 8 times a year, and you get a recipe for a lacklustre response. IMHO.
Genuine question - when 80% of all US dollars in existence were printed very recently (from $4 trillion in January 2020 to $20 trillion in October 2021). [1], how do you not get massive devaluation of the US dollar?
There’s some underpinning techno-libertarian philosophy and assumptions pertaining to believing that claim. I wouldn’t get your central bank news from a website called techstartups. They didn’t print “US dollars” and it’s far more complicated than that. Research how QE works. https://seekingalpha.com/article/4113280-federal-reserve-nev.... Note: I found another seekingalpha “article” referencing techstartups.com too hah!
When your model of how things work predicts one thing, and then the exact opposite thing happens, it's a good time to question what might be wrong with your model. (Hint: "printing money" doesn't automatically make money worth less.)
> Intuition says that it should. So I think that’s what GP is trying to understand.
Velocity [1].
Ignoring it is like sticking a water wheel in the ocean and asking why it doesn’t turn given the depth. Quantity doesn’t turn it. Flow does. And that depends on more than how much water is present.
Haven't heard the water wheel in the ocean analogy, and I love it! Thank you!
There's a very simple mathematical identity: MV=PQ
M is money supply, V is velocity, P is price level, and Q is all goods and services.
So if the economy produces the same amount of stuff (Q is constant) and if V falls in the inverse ratio as the increase in M, then the price level will not change.
>"Consequently, there is a lot of good reason for the Euro to be weak at these times. However, if the energy crisis can be solved and the war contained, a weak Euro also is also pushing exports from the EU. So there is a lot of reason for this trend to be stopped, if not reversed, until the other extreme is reached again."
There is still a lot of inflation outside of energy prices. All of the demand-pull inflation from the pandemic is still there. A weak Euro does not automatically translate to "pushing exports" here. From the article:
>"For years, policy makers have welcomed a weaker currency as a means to stimulate economic growth, since it makes the bloc’s exports more competitive. But now, with inflation in the euro zone at the highest since such records began, its weakness is undesirable as it fans price gains by making imports more expensive. In June, euro-area consumer prices jumped 8.6% from a year earlier. Some policy makers have highlighted a weaker euro as a risk to the central bank’s goal to return inflation to 2% over the medium term, ..."
Wait... so the US army did poorly against guerilla combatants half way across the world, and therefore another country that lost in Afghanastan and a country that hasn't successfully invaded anyone that doesn't border them are a good match?
The US military itself is a weapon - and that weapon is only as strong and effective as the will of the one wielding it. There was no will to "win" in Afghanistan, to a large extent because nobody had a clear understanding of what that even means. Hence the withdrawal, which is a political defeat. But militarily, you only need to look at the casualty rate to see who had the upper hand in fighting proper.
This reads like a troll farm/propaganda account. Nobody with a brain is buying what you are saying. With such a narrow look at the situation sure you can twist it to look like that. The US had no business in Afghanistan and it took them years to realize it. In that entire conflict the worst enemy was themselves. Compare suicide rates vs casualties in battle.
If the US wanted a total war they could have left that place a toxic wasteland with everything dead for thousands of miles. Instead it appeared to be some lame attempt to capture "hearts and minds" with a completely failed attempt at setting up democracy. Was it a total failure, yup. Was it a stunning military defeat? Nope. Just more M-I-L money burning. Money goes into one side, instruments of death coming out the other.
What is the impact of this on ordinary citizens? Not the impact of inflation or impact or gas supplies, etc. The impact of this two currencies having parity.
A variant of this is ... if you're in the US, what are you deliberately purchasing from the EU now (and how?). Are there consumer goods you care about where it now makes sense to order from the EU even with a greater shipping cost + time? If you're in the EU, what are US goods you would ordinarily buy but which are now out of reach?
This is Putin's line. Anyhow, it's not true. The US has been warning Europe (especially Germany) for years that it has become overly reliant on Russian gas and overly dependent on US military aide. Germany even laughed at the US President's face for implying it. Granted it was Trump, but anyone with any semblance of common sense saw this coming, and even someone who is often wrong isn't -always- wrong.
No, just a direct observation! Biden just told Scholz to stop Nord Stream 2 and he immediately complied with the order! And now EU politicians advise the populace to take shorter showers and wear warm clothes inside.
Meanwhile, the Ruble is up from where it was just before the invasion. There is a sudden drop off during the month following the invasion in late Feb when sanctions were applied, but risen since then. It's currently sitting at a 5 year high.
Don't think of the US as having foreign exchange reserves. Other countries have foreign exchange reserves, basically all in US dollar-denominated instruments.
This is misleading if not outright wrong [1][2]. The United States absolutely has foreign reserves, and nearly all countries hold foreign reserves that aren’t solely “basically all in US denominated instruments”. Nor can one just wish away the fact that the USD isn’t the only strong currency in the world, nor the only asset foreign countries hold; diversification doesn’t only apply to individuals.
It's not sustainable in the long term, but that term is actually quite long. This isn't going to be a short or medium term crisis. It's going to take years, and a lot of consistent political will. I hope we're up to it.
> It's not sustainable in the long term, but that term is actually quite long.
I'm not so sure about that. There were a bunch of news outlets warning that Gazprom is on the brink of a massive default. Gazprom, of all companies.
If the company that subsidizes Russia's ruling regime can't make their payments in spite of sitting on a huge pile of oil and gas, that does not bode well for Russia's economy.
In some ways yes, but in practical terms it means they’re locked out of the credit markets and are going to have huge difficulty paying international suppliers. Even the ones willing to deal with them despite sanctions.
JGBs being owned mostly domestically, that particular country's currency is probably not at risk unless big japanese institutions decide to close shop and retire abroad.
As for the Euro, it's currently at a 20-year low, if that's an answer to you. Since the balance of payment is positive, there's probably no reason to be pessimistic in the long term.
Why isn't that already reflected in the price? Surely FX traders (who are mostly very large institutional investors) have already factored this into their models since it seems a very important factor?
RUB is a tiny market in FX and probably not many touching it due to current risk surface.
Very large institutional investors are usually not big FX speculators anyway outside of exposure from their assets. FX tends to be a bit more fast money.
Correct, though there is a huge demand for gold currently. Russia was buying 150 tonnes a year from 2008-2020; annual global demand is 4,000 metric tons. Even without selling it or shipping it, they could likely use it to secure debts to China example.
Hardly. As mentioned in the podcast, the emergency measures are more or less gone, and the Ruble is still staying strong. And raising interest rates to increase the strength of your currency is exactly what central banks can and should do.
There is so much propaganda and "Russia-bad" going around in the media, whether you think it's deserved or not is irrelevant to the quality of journalism taking an extreme nosedive.
Elvira Nabiullina (Russia central bank chair) is IMHO one of the smartest central bankers in the world right now. Much better than "transitory" Powell.
> Elvira Nabiullina (Russia central bank chair) is IMHO one of the smartest central bankers in the world right now. Much better than "transitory" Powell.
She tried to quit at the end of February but was not permitted to.
as siblings noted about Soviet joke - in today's Russia you don't quit your job, your job quits you.
Actually it isn't that much of a joke today - according to the new wartime law Russian government can compel any business to produce the amount of product/service the government wants with the business having no right to refuse, and the government can force people to work overtime, weekends, holidays with the government defining what payment, if any, to happen to the business and the people.
Personally I'd take a weak currency any day. It helped exports.
Going back to Russia's economy, the future investment is dying. Its airplanes are not getting new parts. Siemens isn't repairing any equipment. The full effects of the sanctions won't hit for another few years.
> Personally I'd take a weak currency any day. It helped exports.
This only works if you have a developed enough domestic economy to supply everything you need. Assuming you’re exporting more than food, you’ll need resources to produce anything, and if that’s expensive then your theoretically cheap export pricing can’t be so low.
Russia’s domestic suppliers aren’t well rounded, but they do have energy independence which is a major factor going for them.
Imports into Russia have dropped by over half. meaning they can't use their currency to buy anything. And they import pretty much everything except food and natural resources. Any currency which could not longer be traded internationally would rise as well but it's of little good if you can't trade it for anything.
so before you dismiss all that "propaganda" make sure you don't spread it yourself.
Outside of North America and the EU other regions such as Asia, SouthAm, Africa and ME still trade with Russia.
Yes, it means no luxury goods from the EU and no tech from NorthAm. But the embargo isn’t as broad as one might imagine.
There are some important tool and equipment from the EU and NA that if sanctions remain for years could result in a mega Cuba situation where lots of things are under maintained.
Russia has capital controls. Exporters are forced to buy roubles with 80% of their foreign currency, among other restraints to the free trading of roubles.
If you traded roubles on the black market, you'd get the actual price, and it's much lower there.
This is not true though. You pay premium for cash USD in Russia, but that premium is within 8-10%. Not that far from official rate compared to what one could expect.
>If you traded roubles on the black market, you'd get the actual price, and it's much lower there.
This is simply not true. "Black market", in the form of p2p crypto, had the rate close to the official one since the beginning of the war. Check your sources, they might be biased and feed you bullshit
I don't think any monetary expert would agree with you that Russia or its CB is handling their economy well. It's in much worse shape than the EU or US. Russia is raising rates because they have to, not because it's the good policy choice.
>Ruble is up from where it was just before the invasion.
The prices in Russia reflect about 1.5-2x ruble fall against dollar since the invasion. The official ruble/dollar ratio is maintained by draconian measures/restrictions against exporters and population (plus significant depression of economy which was consuming a lot of imports, like the car market falling 6 times because most of the foreign car makers/traders are gone, similar situation in IT for example, ie. Russian economy collapsed to becoming only natural gas and oil pump). Very similar to the situation back in USSR when dollar was only 0.63 of ruble, yet it wasn't possible to buy any dollars at that price.
Wrt. original post - it was obvious even back in February that the faster Ukraine wins the less hit Europe will take. Europe has been dragging its feet on military help for Ukraine and as a result dragging itself deeper an deeper into an economical crisis. Leaders of France, Germany, Italy still seem to hope that Russia will take a piece of Ukraine, and after that the things will be back to the good old times. This naïve thinking has already obviously failed, yet they are still clinging to it.
There's usually a black market rate in that case. And.. it appears there is here too [0], but at least in May it wasn't as wildly far off as typical when the government starts fixing the exchange rate. Only 15-20% difference.
This is artificial. Import is very low due to sanctions, export is quite high due to energy price hike, so there's a lot of foreign currency sitting idle inside the country, and exporters should pay their expenses and taxes, so they have to sell at whatever price market is ready to buy.
I actually banked on that a bit, enough to offset losses on other parts of my portfolio.
Russia is in tough spot with this situation inflation is high if they drop the rubble it will get crazy high if they don't drop it they can't make the budget work.
> Meanwhile, the Ruble is up from where it was just before the invasion.
A massive economic sanctions package, which eliminates their ability to import goods and services while having their sole export stockpile foreign currencies, does help level the balance of trade.
But that does not mean the economy is not tanking though.
Whom can you sell rubble for euro at that price? No ordinary person that I know of could do it in Russia or outside last time I checked.
Outside of Russia, nobody will take your ruble. In Russia, somebody may, but that's not going to be a bank and the actual cost will be much steeper than advertised rate.
(US dollar skyrocketed to almost 100 ruble in March until Russian government decreed its officially worth 60 except now you basically can't legally buy western currency. HODL mode I guess?)
I say this only because I have a sizable amount of rubles from an earlier trade, and *I have no way to exchange them for USD despite the exchange rate.*
The price you see is a reflection of the price accepted by those able and willing to trade rubles which is currently *a limited subset of the world*. Sure, they have a massive trade surplus due to the commodity shortage, but a lot of the move is engineered through capital controls.
I wanted to start ordering some goods from EU to take advantage of the favorable FX. Turns out a lot of vendors have stopped shipping to the US (especially for goods that are also available in the US). Some of these goods are nearly double the price in the US.
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[ 2.5 ms ] story [ 365 ms ] threadBut, I decided to link to the bloomberg article since it gives a better context.
To my non-expert intuition, it seems a double-edge. Currency devaluation brings the cost of European manufactured G&S cheaper and brings a boost to the economy, and hurts US exports. On the other hand, Bloomberg cites devaluation of Euro would bring more investments in the US as it is now a parity.
It's actually since December 2002.
1999 is the first time the EUR reached parity with (then dipped below) the USD.
https://www.google.com/search?q=1+eur+in+usd
I may still have this issue in my memorandum box. But no, I won't go looking for it. ;)
Basically it's just: high currency is good if you're importing, bad if you're exporting.
These prices are the opinion of a relatively small number of people, some of whom - like certain well known banks - have a long record of bad faith price fixing.
For example:
https://en.wikipedia.org/wiki/Libor_scandal
complete rubbish, FX is the most liquid and actively traded instruments there are
> In terms of trading volume, it is by far the largest market in the world, followed by the credit market.
Furthermore:
> Trades between foreign exchange dealers can be very large, involving hundreds of millions of dollars. Because of the sovereignty issue when involving two currencies, Forex has little (if any) supervisory entity regulating its actions.
https://en.wikipedia.org/wiki/Foreign_exchange_market
One anecdotal example is Czech based JetBrains. They announced a few days ago that they're increasing subscription prices. I presume, they have a huge sales numbers in the US.
I really don't understand macro-econ on this scale, Bloomberg article is good, but would be fascinating to read deep analysis of pros and cons.
I have a colleague who likes to say that “every concept expressed with less than three words is adding confusion instead of reducing it”, and I like this saying more and more every day.
The electronic design industry shrank so quickly that it actually pushed people out into other sectors.
We’re just pouring fuel on the race to the bottom. Lots of old men got to die rich.
Edit: don’t know why parent post was flagged. It was spot on.
Covid vaccines were almost all done by European companies.
Europe is different for sure, and incumbents often use regulations to fight innovation but that happens in the US as well. Internet access for example is a lot better in Europe compared to US.
If we include Britain, there would be 2 websits in the top 100. A Hungarian porn website and bbc.com
Britain is in Europe but not the EU.
spotify.com is swedish, and booking.com is the netherlands. Both of those are part of the EU, are in the top 100, and are not porn websites.
There are more I'm sure, but I know those off-hand.
Both are not on Wikipedias list of most visited websites:
https://en.wikipedia.org/wiki/List_of_most_visited_websites
Maybe that's stale and there's other preferred sources now.....
But you linked a "top 50" list, which seems obviously useless to make the claim you're making.
https://www.visualcapitalist.com/ranking-the-top-100-website...
turns out retaining the ability to set your own interest rates is important
euro-nationalists kept saying after brexit the euro would hit parity
(but they expected it to be against the pound, not the dollar)
Citation needed. Data I can find indicates that the US does pretty well for speed: https://en.wikipedia.org/wiki/List_of_countries_by_Internet_...
That said, I have no doubt that the cost of internet in the US is substantially higher than in Europe.
Also longer vacations and a more relaxed working environment.
I know of far more people heading to the EU from the US than the other direction.
Relative to health care in the EU, not that good. Top-tier platinum PPO from top silicon valley employers is still going to cost a lot out of pocket (way above the so-called max out of pocket) if you have health expenses and that's on top of the $25K-$30K we're paying for the coverage itself.
A top tier platinum plan will, per the legal definition of platinum, pay for 90% of expected health expenses.
Max out of pocket should be less than $5k for a family of 4 on a platinum plan, and the employer will be paying 70%+ of the premiums, if not more.
Assuming you are seeing in network providers, which for a top tier platinum PPO should be almost all doctors, and a BCBS plan would be nationwide, then your premiums would be say $500 per month for a family of four, and out of pocket max will be $5k per year at most.
Total expenses of $11k per year for the most expensive locale in the US. And that is assuming you max out health spending every year, which probably will not happen. And that is off the family has only one working adult.
And you get an HSA to invest $7.3k per year and withdraw it tax free at any point in the future. You can have a few hundreds of thousands saved up for healthcare expenses by the time you retire, all tax free.
People on traditional plans can have FSAs but those typically don't let you really accrue from year to year.
My gold level high deductible health plan has a ~$3k deductible I think (for family coverage).
I imagine even a platinum plan can be high deductible if the deductible is set to equal the out of pocket maximum.
Either way, the numbers will not be too different for gold and platinum plans.
You're wrong. I'm not speculating here, I'm talking about the real numbers.
My monthly premiums for a Platinum PPO plan through my employer (in Silicon Valley) is slightly over $2K/month (for a family of 3). Same plan at my previous employer, same price (a bit cheaper but that's because it goes up every year). This is also very similar to what an ACA plan would cost. Your guess of $500/mo is way off.
So out of pocket is ~$25K on premiums alone (pre-tax though).
> Why would it cost more than the “so called max out of pocket”?
You can easily go above what the insurance company calls "max out of pocket". Again, I'm not speculating here but telling real experiences.
That's because if you get a bill for, say, $10K, the insurance company can decide they will only pay $8K so you're stuck with $2K. But not all of that $2K is counted against the out-of-pocket max. The insurance company will say only some smaller amount, say $500, will count as credit towards the out of pocket. So I get to write a check for $2K but in the eyes of the insurance company I've only paid $500 this year. Repeat a handful of times and I can easily go over the so-called max out of pocket in real money.
My calculations are for the portion the employee pays directly, meaning the ~25% to ~30% the employer does not pay.
Since all employers of this caliber part the 75% portion as a benefit without option to receive it as cash compensation, it is not appropriate to consider the employer subsidized portion in the amount the employees pay.
> That's because if you get a bill for, say, $10K, the insurance company can decide they will only pay $8K so you're stuck with $2K. But not all of that $2K is counted against the out-of-pocket max. The insurance company will say only some smaller amount, say $500, will count as credit towards the out of pocket. So I get to write a check for $2K but in the eyes of the insurance company I've only paid $500 this year. Repeat a handful of times and I can easily go over the so-called max out of pocket in real money.
If you have an ACA compliant plan, which the platinum designation indicates it is, this should not be happening for in network services that have prior authorizations. Either the insurance company thinks you are being given superfluous treatment not supported by evidence, or the insurance company is ripping you off in which case you need to file an appeal.
https://www.healthcare.gov/marketplace-appeals/ways-to-appea...
I have had 2 childbirths since ACA was passed and both years we hit out of pocket maximum and did not have to pay a dime afterwards.
I'm talking about the employee-paid portion deducted from paychecks.
People who are surprised by this tend to be single. Most companies usually pay close to 100% of the employee premium. But they are far less generous on the family member premiums.
> this should not be happening for in network services that have prior authorizations
There's a lot of insurance company weasel wording in that phrase. Plenty has been written on how when you go to an in-network hospital, turns out that every doctor who shows up while you're unconscious (some of whom you'll never even knew saw you until the bills arrive a few months later) is actually an out-of-network contractor.
Lots of things shouldn't be happening, but happen every day in the US health care industry.
I can see this happening. However, in my ~3 different employer experiences, the employee and children are very well subsidized, and the spouse is the only one the employer usually does not cover to incentivize the spouse to use their own employer’s subsidies.
> There's a lot of insurance company weasel wording in that phrase. Plenty has been written on how when you go to an in-network hospital, turns out that every doctor who shows up while you're unconscious (some of whom you'll never even knew saw you until the bills arrive a few months later) is actually an out-of-network contractor.
This is true, and I had not experienced it. Good news is that is illegal now:
https://www.cms.gov/newsroom/fact-sheets/requirements-relate...
The last couple years have had quite a few good rules come into place, including another one that obligated your doctor/hospital to give you a good faith estimate for which you are only responsible for the estimate + $400.
It is still extremely risky and costly in the US, even if you have nice employer subsidies because the second you lose the ability to work, you are on the hook for many, many thousands of dollars of expenses at the same time you no longer have income. And then if you want government help before age 65, you basically have to liquidate all your assets and become poor forever. Dual income families are almost a requirement just for that reason.
Age 50 to 65 is extremely risky in the US. A few wrong steps and you are deciding between sacrificing your kids’ future to save yours.
I'm going to guess that you're young and probably single (or your partner gets insurance separately).
Besides bragging rights, I can't see why anyone would want the Platinum PPO. My 'HDHP' PPO costs me ~$200/month for a family and has a family OOP max of $6K. Even not including the HSA tax breaks and the $2K contribution to that HSA from the employer, that extra $1800/month for the 'no cost' PPO would easily be hit by the OOP max in only a few months. That's assuming you actually hit the OOP every year.
For other Americans, yeah, this is how many get into medical debt.
Maybe because, IME, 90% of US offers are: Remote (US based)?
I doubt Germany, France, Austria etc. would see much significant drain. Poorer countries (eg Poland) have been already hit quite hard and might be impacted a lot more by this though.
I also doubt the amount of braindrain, i see a lot of brain-gain where I live (in the south of germany and I don't include europeans).
Less? By what metric? The tax burden is lower in the US than in Europe by a good amount. Does paying a lot more in taxes not count toward paying for social services?
The problem with money savings is that they might not keep their value. Last thing I want is to be old, ill, broke and living in a country with no free social services. That said, it all depends on the risks one wants to take... Life is dangerous. :)
By all accounts of everyone I know in Canada and also those in Canadian Healthcare, the system is on the verge of collapsing
Sure enough, if you take the small percentage of extreme tech talent or very entrepreneurial employees, many in that group might consider taking their business to the US.
But how much is that really? 1%? 5%? Can't be much more. So, 95-99% don't...hardly a brain drain.
The other thing Americans can't seem to comprehend is that not everybody is a dollar-chaser. For the typical European, if they have a decent quality of life and some reasonable disposable income, they are satisfied.
Bread and games as they say.
* Top 1% pay 48% of all income taxes * Top 5% pay 59% of all income taxes * Top 50% pay 96% of all income taxes * Bottom 50% pay 3% of all income taxes
https://www.ntu.org/foundation/tax-page/who-pays-income-taxe...
The point I made is that I don't expect a "lot of braindrain" from Europe and that this concerns a tiny percentage willing to move to the US. What is the relation with the tax revenue you shared?
The counterpoint to that will often be "But, why not just work extra hard in the US for 10-20 years, and then retire? I'd much rather work hard now, and then live my life at [30/35/40]" which is probably also a valid point, but Americans will soon notice that Europeans are in a much less hurry to "retire".
It all comes down to labor laws, and work/life balance.
There are TONS of talented workers in Europe, that live just fine as it is. And many just truly enjoy a relaxed, easy, and predictable lifestyle.
This is a great reminder that keeping your money afloat is not that hard as long as you can export. (For the record, what destroyed Venezuela comes from the fact that they needed to import light oil in order to process their heavy one. Once the sanctions cut the input flow, the output flow dried up pretty quickly and it was game over)
I don't think it will matter long, given the catastrophic failure of the Russian military (which is currently demilitarizing Russia pretty quickly, how ironic), but from the economics PoV it's still interesting to witness.
https://www.xe.com/currencycharts/?from=EUR&to=RUB
Indeed, thanks. Not a native speaker here, and I got everything mixed up with the early-war pun “the Ruble is going to rubble”
> What definition of strong are you using? Ruble […] has historically been around 85:1 and now its ~60:1. (Rubles:Euros, i.e. 85 Rubles for 1 Euro)
Yes, that means Ruble's purchasing power increased by 40% (one Ruble could buy you ~1.2 euro cent, and now it buys you ~1.7).
IF you had your money in Rubles last year, can buy 40% more of a product than if you had your money in Euros.
*not under sanctions.
They are buying rubles 10.75 RMB and selling at 12.5 RMB. They are selling USD add 674.
This gives 63 rubles to the dollar.
The fact is that major economic powers in the world have not signed onto sanctions and have access to both Russian and Western currency.
It is true that many parts of the West have lower need for rubles because of sanction, but if you I think that the entire Globe has frozen trade with Russia and trade in Russian currency, you are the one that has fallen for propaganda. They just no longer can use western exchanges to convert currency. See the link below.
https://www.google.com/amp/s/markets.businessinsider.com/new...
So far you have changed your position from you can't trade it at all to the spread might become incrementally worse if trade exceeds 700 million US dollars worth a week
Second, this exchange is in Russia. Can you actually move your "yuan" from that exchange to China or anywhere outside the country?
Unfortunately, Europe does not control the flow despite whatever legal arguments they can muster.
The contracts likely have clauses related to failures to deliver, and Russia will have little influence over how those clauses will be implemented.
Im sure there are plenty of clauses, but once you are at economic war with a country, the contracts don't matter. They aren't worth the paper they are printed on. Thats my point.
Russia says old contracts are void and has the gas. EU Can agree to new contracts or go without. They cant use the old contracts to make Russia give them gas on the original terms. What will they do if Russia refuses? sue them for breach of contract, sanction them, and seize their foreign reserves?
E.g. if Russia would continue with gas supplies, the money for gas would got into the locked accounts. After war would end, Russia would get locked accounts minus reparations. Now if Russia stops supplies, after war ends Russia will get locked accounts minus reparations minus penalties for the failure to deliver gas.
Plus, they aren't planning to leave Ukraine, so they aren't planning to get it back
Therefore the money is a sunk cost and not leverage. Therefore finical penalties don't matter.
The u.s. and Canada have a demilitarized border. This would be bad for the u.s. if we went to war with Canada. However, we don't plan to go to war with Canada, so we aren't basing our decisions on that outcome.
Your claim is essentially there's no line, or that there is not a spectrum or that that line is beyond any economic measures. But there's no proof of that, so the logic in your "proof" is circular because your proof predicates on you knowing exactly where the line is (or isn't), when the location of the line is the thing to be proven.
I am saying that it unlikely to be reached and my personal opinion is we are moving further from it not closer.
I'm also saying that Russia is not making decisions as if it will be crossed. They are doing the exact opposite, making decisions assuming that they will not be forced out and will not get the reserves back.
I don't think they would realistically get the foreign reserves back even if they left, so that isn't much of an incentive.
The US and EU have to much politically at stake to hand them back, even if they leave. It would be seen as letting Russia get away without consequences for the invasion.
Time will prove one of us wrong. In 5 years Russia will either be occupying Eastern Ukraine or not. They will either have control of the foreign reserves back or not.
It looks like Russia is also only accepting rubles for wheat [2].
This is the obvious and natural result from the sanctions. OF course they will not accept a currency they can not spend anywhere.
[1] https://www.russia-briefing.com/news/russia-insisting-paymen...
>The EU’s executive body told the EU governments in a closed meeting that the authorities were not preventing companies from opening accounts with Gazprombank and would allow them to buy gas in line with EU sanctions.
>The EU will get a taste of what this means as Russia is turning off the still-operating Nordstream 1 pipeline for ‘routine scheduled maintenance’ from next Monday, July 11th to July 21st.
[2] https://dailytimes.com.pk/962297/russia-imposes-ruble-restri...
Yeah, that's how sanctions work: unilaterally.
To make priorities clear: Attack war is a crime and Putin, his government, and army leaders belong to Den Haag and then into prison.
But every westerner continuing to drive their car, fly to holidays and other wasteful lifestyle activites makes energy prizes go up and pays for Russia's war. Europeans a bit more directly than Americans, but in the end we have a global market so nobody goes free of reponsibility. Nothing they will end up in court for (would be a miracle if even Putin did, Bush and Blair didn't for doing not too differently), but certainly morally wrong.
Haven't checked recently but a month ago or so it was said Russia earns more money for oil and gas than in February, despite the volume having decreased quite a bit.
This restriction has been removed couple of weeks ago. At first it was 80%, then 40%, now it’s gone.
Which Russian companies still have significant income in foreign currency? I thought trade has mostly stopped. Except for energy, but that is dealt with in a different way anyway as discussed above, because still excluded from sanctions from the West and the Ruble requirement from Russia.
Then there is of course China and India which seem to intensify trade. No idea what currency they pay in and whether the increase has already been significant during 4 months.
Once the euros are converted to rubles, it's unlikely they get converted back into euros somewhere else in the supply chain. As opposed to USD, which facilitates 87% of world trade.
That means net selling pressure on the Euro.
(I think this thread is silly though: there's no way enough people will move to warm climates for the winter to make a dent in cold-country fuel consumption.)
Link?
As far as I know, there's nothing like this in the US, and it's something that I've known broke people to do.
They also seem to be the only airline that isn't cancelling thousands of flights right now. As much as I dislike them, they seem to be well run.
I still remember their proposal for ultra-cheap standing-only tickets (couldn't get that one past regulators). Kinda wonder if it was seriously meant or not.
Under the seat bag: 0 Reserved seat: 10 10kg checked bag (carry on size): 16 20kg checked bag (full size): 26 A bag being overweight by 1kg: 70
So they get pricey quickly if you're taking any decent amount of luggage. God help you if you don't have accurate scales at home.
(They have the scales available before check-in, so it's reasonably fair.)
If you read the costs closely and can avoid them, they work great. I flew from SFO to Stockholm with Norwegian Airlines for $400 return on a 787. About the same as SFO to JFK.
But it was no frills. No even free water served (you could ask for it) or any meals. If you prepare it’s great. If you don’t it’s pricey.
Fare USD $ 1.49 Taxes & Fees USD $ 273.96 Total USD $ 275.45
Ryanair repeating this story gets them free advertising reassuring people that they try and minimise costs.
I also respect their honesty. They tell you "we get you from A to B the cheapest way", no more. Traditional airlines' ads are all about traveling in luxury, which is extremely dishonest considering 99% of their travelers experience a not-far-from-Ryanair level of comfort.
At the end of the day most currency holders want a liberalized currency and CNY is far from that.
[1] https://www.census.gov/foreign-trade/balance/c0003.html
And given the deficit there is more of former happening than the later.
For US entities selling to EU, nothing changes, but for EU entities selling to US, they would receive less Euros for a given amount in Dollar. As their cost structure is in Euro, they will have a lower net income.
[0] https://en.wikipedia.org/wiki/International_use_of_the_U.S._...
It doesn't have the natural resources that the US/Russia/China have. It is interesting that the time was the nations that would be the EU were most dominant, they used colonization to get the resources from all over the world (see for example British Empire).
In addition, there is still lack of political unity, with a much less powerful centralized government compared to say China or even the US.
Just an example: https://www.cadtm.org/Africa-How-France-Continues-to-Dominat...
France is still operating a colonial governance system, we just kinda ignore it.
I've had many arguments with people where I can't get it across that it costs a lot to get a human being all grown up, socialized, educated and ready to work in high value industries. Then we get them swept away to the west (and for good reasons, more money, higher quality of life etc.) and end up with nothing for all our societal investment. If we're lucky, some of them come back with some know-how and create a viable business, but most don't bother.
3 / 4 of the people I went to school with (primary, secondary, high school and college) are now gone for good. Almost as many upcoming graduates (soon to be 18+) are planning to either study here and go, or just go.
This pains me as someone that decided to stay behind and try to change something. But I do understand their motivations.
Resources are nothing without people.
They are overrated until you don't have any. It's hard to manufacture anything without natural resources. It's hard to heat your home or fuel your car. As far as the "stable civic institutions" the farmers in the Netherlands would like to have a word with you.
For now. Take a look at those demographic age pyramids and sub-replacement fertility rates. What's the population of the EU going to be in 2100?
I think any sober assessment of which regions will achieve or maintain economic preeminence in the coming decades would have to include Europe and almost certainly exclude Russia.
I think relying on (taking advantage of?) cheap Russian gas is only a mistake if you also think that giving Russia a pass over annexing Crimea was acceptable. In reality choosing to do both was a catastrophic error. You can make deals with your enemies (and both Russia and China as oppressive expansionist autocracies are choosing to be our enemies), as long as you make it clear where your boundaries are. We didn't do that clearly enough with Russia, and cannot afford to make the same mistake with China.
Western democracies can do that only to a very limited degree. That’s why economic interdependence doesn’t work with autocracies.
Edit — sorry, misread the graph scale there. At any rate, the euro has been more stable against the pound in the last few years than either of them have been against the dollar.
- the EU currently has a trade deficit. This is the first time ever. Reason is the energy crisis due to sanctions against Russia: energy prices have skyrocketed and EU is importing loads of energy
- the ECB has been printing money like crazy in the last 14 years. So far this money had been absorbed mostly by banks but slowly but surely it is starting to trickle into the real economy. Recently the ECB has finally increased interest rates and stopped buying Southern European bonds, however they had to start up their bond buying program again because Southern European government bond interest rates went up dangerously fast. This has undermined the belief that the ECB will be able to effectively battle inflation
Did they? I thought they agreed (or iterated) that a rate increase is almost certain. But the increase itself is yet to happen (and it's not clear they are going to increase it by how much)
This is wrong, none of the money the ECB "prints" goes out into the real economy (see [1] e.g.).
[1] https://themacrocompass.substack.com/p/tmc-6-all-they-told-y...
Imagine two currencies ABC and DEF. They are at parity (ie 1 ABC = 1 DEF). ABC's central bank has 10% interest rates. DEF's central bank has 1% interest rates. What happens? ABC strengthens against DEF just based on the interst rate differential.
Why? Imagine if it didn't. You could borrow DEF 1B, convert to ABC, earn 10% interest and then pay it back later. If the exchange rate remains fixed, that would be a risk-free return of 9%. Because of that it doesn't happen. Think about it. This creates demand for ABC.
Because of skyrocketing inflation, the Fed has raised interest rates. Europe has not [1] and really can't.
Secondly, in uncertain times, there is nearly always a flight to the safety in financial markets, which usually means US Treasury bonds. This too creates demand for US dollars.
So there are issues with th eEuro but really what you're seeing is a strong US dollar. This is a temporary situation.
I'm not saying the energy issues in Europe aren't significant. They are. We can hope this creates pressure for a peaceful resolution to the war in Ukraine. This idea seems to make a lot of people angry like it means capitulating to Russia. Every conflict ends diplomatically (including WW2). Russia too is facing pressure to find a win and end the war as it's not sustainable long term so we're really in a game of chicken. Putin may be hoping a European winter (where the effects of an energy shortage will be more pronounced) will sway the odds in his favor.
[1]: https://www.euribor-rates.eu/en/euribor-charts/
Italy already pays 1.9 percentage points higher rates than Germany, and has 140% debt to GDP. If the ECB sharply raises rates, then Italy's debt might become unsustainable. The Economist notes: "The country probably cannot tolerate yields on its bonds much above 4%. Around that point, the goals [of the ECB] of price stability and defending indebted countries would become irreconcilable. Should interest rates surge, the euro area would look dangerously frail. "
https://www.economist.com/leaders/2022/06/23/how-fighting-in...
So, a certain level of inflation is actually good. The general benchmark modern developed nations go for is 2-3%. High inflation can cause all sorts of problems even without getting into hyperinflation. Negative inflation ("defaltion") or even zero inflation causes problems too. Just look at Japan over the last 35 years to see this in action. Deflation promotes saving rather than spending such that there is less economic activity and this has a knock-on effect on creating unemployment.
Side note: lack of consumer spending is a ticking time bomb for China thanks to having to fund your own retirement and the demographics caused by the One Child Policy.
So 2-3% is really the sweet spot.
It's also worth noting that countries that run deficits like inflation too as it decreases the real value of their debt.
Central banks can contrl interest rates by setting the benchmark rate. For example, if the Federal Reserve offers 5% for US Treasury bonds (which are considered essentially "risk free") then why would a bank lend a business or you money at less than 5%? It's more risk for a lower return. This is monetary policy.
So as you can imagine if someone can only borrow money at 20% vs 2% it will have an impact on economic activity. That's the point. In the US, high inflation is seen as being driven by demand outstripping supply so interest rates are a crude tool for reducing demand. That's why the Fed has been raising rates.
The eurozone largely has the same inflation problem thanks to energy demand and housing but doesn't have the economic activity driving it. So if the ECB were to aggressively raise rates, the fear is this could cause a deep recession in the eurozone.
So that's what I mean by "they really can't> The eurozone has the inflation but not the economic activity.
You're quite optimistic. I fear this is a 1930 moment. By the end of the decade we might have a Nazi Russia, WW3, North Korea attacking the South, China taking advantage of the situation and invading Taiwan. Japan remilitarising and maybe becoming a nuclear power.
I'm not sure if you're talking about Putin or after Putin. Putin is an autocrat in all but name already. It's unclear whta'll happen to Russia when Putin inevitably dies. It could plunge into chaos, which is a big risk of any cult of personality.
But Ukraine has revealed that Russia's military is a paper tiger. Russia too is in decline (demographically).
> WW3
So if we actually have nuclear war between major powers, it's over. There's really no point worrying about this happening because it's unlikely you can impact this outcome so you'll be better off just assuming it won't happen.
> North Korea attacking the South
I don't fancy their chances. Sure NK has a large standing army but they can barely feed themselves. Kim Jong-Un isn't an ideologue. If anything, he's Saddam Hussein, which is to say he's motivated by his material reality rather than, say, any kind of fundamentalism. Kim likes his luxuries. Attacking the South would invite his own personal ruin. The only way I see this as realistic is if NK will otherwise collapse. Is a collapsing NK really that much of a threat? I mean they could cause a lot of people to die but could they succeed? I somehow doubt it.
Remember too that NK only really exists because China wants it to exist. China, like any major power, likes having buffer states between it and other major powers. The US is no exception here either. The US almost started wW3 over Cuba after provoking the USSR (ie Jupiter MRBMs in Turkey).
China doesn't war on th eKorean peninsula. China likes things the way they are. Just how long would NK survive without Chinese support?
Side note: it has been a huge failure of US foreign policy not to consider that Putin too would want a buffer to NATO.
> China taking advantage of the situation and invading Taiwan
What'll eventually happen with Taiwan is a big open question. China knows what a shitstorm it would be to invade. Success isn't guaranteed either. A small body of water can be a huge barrier to even large militaries. Only 17 miles separates England and france at the closest point and Nazi Germany could never cross it and invade. Had there been a land bridge, the UK would've absolutely fallen in 1940-41. No one has successfully invaded England by sea since 1066.
> Japan remilitarising and maybe becoming a nuclear power.
Japan is a declining power due in large part to demographics. Japan is a bit like the UK in that it is highly dependent on imports. It also has a major power in the form of China as a direct neighbour. I really doubt Japan is the will or even the means to become a major military power.
I'm honestly way more concerned about the rise of fascism in the United States than anything you mentioned.
I mean, if you're calling Japan a declining power due to below-replacement birth rates, then every industrialized nation, including Russia and the US, is a declining power.
Russia has lost the blitzkrieg but gained ground in Donbass through regular warfare. They are throwing USSR era resources into the battle and haven't even issued a general mobilisation order. When China is going to sell them computer chips, they will have the resources to build guided missiles and ICBMs. I'm afraid they are not quite the paper tiger that the Western press is painting them to be, nor the 'glorious' USSR. I hope this war would end up like Afghanistan for Russia, further weakening it and leading to yet another break up. But it might end up like Chechnya.
I don’t think much can help Russia at this point in time it’s really just a matter of time till they run out of steam, it is Afghanistan all over again.
Global warming. Checkmate, Putin.
There are indeed other mechanisms, e.g., currencies with higher interest rates experiencing higher demand, but that also has limits/doesn't hold strictly etc.
The carry trade in FX, i.e., borrow in low yielding currency invest in high yielding currency is a classic trade, but it is not risk free. FX can move against you.
Basically, uncovered interest rate parity says that the interest rate differential creates an offsetting effect in the FX rate. Empirically, that is a bit shaky/doesn't always manifest, there are debates on time horizon, etc., though. In short, FX not easy to predict.
> ABC's central bank has 10% interest rates. DEF's central bank has 1% interest rates. […] You could borrow DEF 1B, convert to ABC, earn 10% interest and then pay it back later. If the exchange rate remains fixed, that would be a risk-free return of 9%.
If you have now 100 ABC = 100 DEF you have the choice of getting in 1 year 110 ABC or 101 DEF. If ABC depreciates against DEF and in one year 1 ABC = 0.918 DEF both choices become equivalent.
WW2 ended with Berlin being captured by the allies and Japan being nuked. How was that a diplomatic end to the conflict?
[1]: https://en.wikipedia.org/wiki/German_Instrument_of_Surrender
[2]: https://en.wikipedia.org/wiki/Surrender_of_Japan#Occupation_...
The Allies said to Germany they wanted unconditional surrender. The Germans agreed. Various terms were agreed to including the cessation of military operations (on both sides). This is, by definition, a negotiated agreement ie diplomacy.
Putting the highly questionable ethics of the two atomic bombings of Japan aside for a second, these bombings like any military operation are ultimately a negotiation tactic.
Supply shortages are something Western policy makers haven't had to contend with for quite some tine, certainly not in the lifetime of the policy makers!
My understanding that the US stimulus was generally unparalleled
In 2021, EU total amount of quantitative easing was 2.947 trillion euro's. https://en.wikipedia.org/wiki/European_Central_Bank#Low_infl...
US: $4.5 trillion https://en.wikipedia.org/wiki/Quantitative_easing#:~:text=Th....
EU: 3.4 trillion euro (https://www.ecb.europa.eu/mopo/pdf/APP_cumulative_net_purcha...)
US: 8.9 trillion usd (https://www.statista.com/statistics/1121416/quantitative-eas...)
3 trillion euros / ≈14.5 trillion euro gdp of the eurozone ≈ 20.6% of gdp
4.5 trillion USD / ≈23 trillion US gdp ≈ 19.5% of gdp
[1]https://en.m.wikipedia.org/wiki/U.S._Dollar_Index
[2] https://www.wsj.com/market-data/quotes/index/DXY/
But again, this is not at all my area of expertise; I'm a rank amateur with barely any skin in the game. I'm very happy to learn other opinions and ways these things are determined.
https://www.tradingview.com/symbols/TVC-EXY/
[1] https://www.euronews.com/my-europe/2022/07/01/inflation-in-t...
[1] https://www.bloomberg.com/news/articles/2022-05-03/europe-in...
Just curious, how would supply constraints lead to inflation? I'd expect lower supply would cause deflation
When there's a supply constraint - not enough hamburgers to go around - the price of hamburgers goes up and as such there is inflation.
Inflation refers to the price of goods increasing.
If supply reduces and/or demand increases, all else equal, prices increase. If supply increases and/or demand decreases, all else equal, prices decrease.
No reason it can't be both. Plus USD is still viewed as the safe haven fiat currency (deserved or not), so USD always displays relative strength vs. other fiat currencies when there is stress in the markets.
The actual original point though, was that ECB cannot raise rates without causing Italy and others to default, or requiring 'austerity' that would probably cause civil unrest. That isn't the fault of the Germans. It is the fault of other European countries that have never got a grip on their government spending levels.
Just an example, as part of the CARES act, congress allocated 800 billion for PPP loans that were supposed to go towards payroll. Now the Federal Reserve finds only 25% went to employees. So that was basically an unnecessary infusion of 600 billion into the economy over a really short time window. And that money went to people who already had plenty of money. Is it a surprise why the housing stock is so low?
My new treadmill at the business was supposed to be delivered last April. They have not provided a new date.
It took LG 6-7 months to replace (ship) the broken TV under warranty.
My franchise changed towel/linen manufacturing 3 times as old suppliers are not able to deliver. New prices have more than doubled.
Lotion order I put in Nov was delivered in June.
Some might say this is anecdotal but this is the case at every single hotel in America. A lot of small hotel owners are buying supplies from local Walmart stores too.
Also, Discussion of Europe's lack of mega companies / weakness is often a theme here, and there are many fair points to be made about its lack of entrepreneur culture and unfriendliness to business. But I'd like to point out that it's worth to think about more than just economies in comparing the EU to the rest of the world. So let me mention a couple of other things worth noting:
Stuff like GDPR or the currently-in-the-works AI act (not to mention all the other rights and wellfare benefits common in much of the EU) don't help the EU's economy but do benefit its citizens in many ways (as far as I am aware).
A bunch of countries in the EU (looks like about 12) has a happiness index score higher or the same as the US (https://www.theglobaleconomy.com/rankings/happiness/Europe/). Many of its countries also have higher life expectancy (https://www.worldometers.info/demographics/life-expectancy/).
- car makers, three of the top ten (world wide) are German, one is French-Italian with brands in Japan and the US
- pharma: pretty even split between US and Swiss companies, two entries in the top ten from the UK, one from France, none from Germany
- chemical: two German (no idea why statista wouod count Linde as an Irish company), one from Belgium and one from France in the top ten
-aerospace&defence: one British, one French and Airbus (by alleans Frenxh but count it as European if you want) in the top ten
I could research this further, but German companies don't seem to be over represented when it comes to large international corporations
I guess you can easily argue that a stronger economy also is pro-citizen and benefits the people. I have had discussions with close friends in EU and I get the opposite response. They're all in tech aiming to move to CH for better salaries and stronger capitalistic/enterpreneurship environment.
US have common language and culture. EU is one zone with different barriers to crack.
It would be like launching your SV startup only in California and not getting the other 49 states for 'free'. For each new state you launch in, there is regulatory burden and language burden, not to mention culture differences affecting UX. Small markets limit growth and reduce ability to raise capital -> ergo the US competitor will almost always win.
Language and culture, you cannot force to change. Something people love in Germany, most likely will not fly in Spain or Greece.
To drive demand is much trickier than solving tax issues.
If you're going to handpick states within the EU, shouldn't you also handpick states within the USA?
In contrast, many commentators thought London (and Paris to a much lesser extent) would take financial market share away from New York during the aughts, the heyday of globalization. Celebrities like Gisele famously demanded to be paid in EUR, while Jay-Z showed off his Euro notes in the video for "Blue Magic."
Yeah, the biggest economic problem is definitely nationalism and not, say, excessive covid lockdowns or gas sanctions.
Also importantly, the EU's economic raison d'etre ended last quarter.
It was simple: Germany props the EU with transfer payments and EU members commit to buying German goods. Now Germany has a trade deficit. A major exporter-manufacturer has a trade deficit. That's like China having a trade deficit. This is absolutely cataclysmic and an economic fuse of unknown length just got lit on the EU.
And the worst probably isn't even behind us as Brussels continues to self-destruct for the sake of stopping a comic-book villain version of Putin who is apparently an existential threat to the West, but also not powerful enough to even take over Ukraine.
I'm not one for predictions, but unless Brussels comes back to reality and stops dealing with platitudes and the ideas of insulated Davos elites, it's quite likely the EU ceases to exist as we know it within the decade.
EU people gave control to Schwab. Your timeline looks to be correct for EU crack-up caused in part by unpayable pension obligations. In the meantime, my tourist dollars spend further in Europe this summer.
You might be underestimating how close Vladimir Putin is to a comic book villain. I'd recommend you to take a look at https://meduza.io/en/feature/2022/06/16/the-criminals-in-the... . (Meduza is a reputable Russian journalistic medium, operating in exile from Rīga, Latvia. )
> I'm not one for predictions, but unless Brussels comes back to reality and stops dealing with platitudes and the ideas of insulated Davos elites,
I've noticed from up close how much of the EU structure, especially the EU parliament, is actually very approachable by the ordinary member state citizens it is supposed to serve.
> it's quite likely the EU ceases to exist as we know it within the decade.
The risk certainly seems a lot higher that for the US or Russia. "Quite likely" is a bit of an exaggeration at this point though. I do hope a decent EU will last quite a bit longer. I feel like all recent crises have actually strengthened the EU.
Russia is more than powerful enough to take over Ukraine on its own. But Western aid to Ukraine — because of the perceived Russian threat — has been enormous. US direct military aid since the major invasion this year being more than Ukraine’s most recent annual defense spending.
Inflation redistributes wealth from people who earn and save in local currency (lower and middle class most impacted) to benefit those who deal more in foreign currency (upper middle class, rich people).
Any inflation above the stability rate, produced by monetary policy, is government thievery plain and simple. I say this as an exporter who financially benefits from local currency inflation.
Only for exports that don't rely on imported components, because such components will get more expensive.
This doesn't matter. You buy wheat at $100 and sell breads at $250. You net $150 and convert that to, say, €150.
- in time of a crisis, the world seems to ralley around the dollar, as it is backed by the strongest economy and the strongest military.
- this crisis has hit Europe hard, as it is not only close to the war, but of course, too dependant on Russian oil and especially gas.
- there was a lot of inflation internationally, the US federal bank was the first to raise interest to combat inflation. The EU lags behind and is limited in action due to the fear of destabilizing some of its member countries with too high of a debt.
Consequently, there is a lot of good reason for the Euro to be weak at these times. However, if the energy crisis can be solved and the war contained, a weak Euro also is also pushing exports from the EU. So there is a lot of reason for this trend to be stopped, if not reversed, until the other extreme is reached again.
All of it a result of moronic politics around nuclear and a failure to build out fossil fuel capacity while the green energy transition was still in progress.
Nuclear certainly is crucial in the mix. And used as such: Europe has a lot of nuclear power.
But nuclear is slow. Terribly so. Even an operational plant needs days to react to increasing or decreasing demands. And building such plants from scratch, or extending existing ones, takes decades. Never months.
you can read about this concept here: https://en.wikipedia.org/wiki/Heating_element
Anyone using electric baseboards is getting highly subsidized electricity because any other energy source is cheaper.
Only place I saw baseboard heating was in school portables.
It’s something I’ve always wondered:
At night, it might be more cost effective to heat a bedroom electrically than an entire household with gas. But that’s a forced air heating issue: you can’t block 75% of a furnace’s airflow and expect it to keep working. Europe usually has boilers and radiators so dialing down heating to just a room is possible.
Or better yet, heat the person with a mattress pad instead of the building air at night.
Electric water heaters and baseboard heaters are common, and extremely efficient. In fact, resistive heaters in the scientific sense (watts in vs. watts out) are the most efficient form of heating.
They're extremely reliable and cheap because of how simple they are.
They may not be _cost effective to run_ in many regions due to high cost of electricity (per watt as compared to gas). But here in BC Canada, resistive elements are extremely common due to relatively cheap power (Hydro in our case). For whole home heating, heat pumps are usually used in new builds because of their advantages, but they're still very tied to the grid and have elements in them for defrosting and the like.
If you scaled up nuclear you'd similarly see prices of electricity drop, and if you have the grid infrastructure (or build it), electric heating (for your home, water, cooking, whatever) becomes pretty attractive.
But I'm glad you've been convinced :)
Electric resistive heaters are 100% efficient - they convert 100% of the electricity into heat.
Electricity heating does produce a bunch of heat at other places though, and it all comes from work, whereas the gas could only produce maybe 70% as much work if used some other way.
Yes there are inefficiencies at generation and transportation. But I don't think those are usually counted when talking about the efficiency of a home device. And it certainly won't be enough to bring it down to 0%.
As an illustrative example, you could get the same heating effect by putting the electricity through a computer or other appliance, or by putting the gas through a heat engine to produce electricity which is used inside the home and warming the house with the waste heat.
I know about heating by computer because for the last several years I've heated my apartment solely by mining Ethereum on my computer. The only dedicated heaters that my apartment has are resistive electric heaters built into the walls, so it's better for me to get a little Ethereum plus heat than just heat.
You could frame it as fraction of the heating that is possible at carnot efficiency, I guess. Ie. the amount of heat you put into your room / the amount of heat you with a perfect machine could at typical temperature differentials.
Then an element would be about 10-15% efficient (as measured at the wall vs. an ideal heat pump) and gas would be...awkward to calculate (I'd have to open up a textbook if not just multiplying max COP and max thermal efficiency of a heat engine), but somewhere in the 20-30% efficient range. Electric including a thermal generator would be in the 8-10% range somewhere.
Electric heat pumps would be around 50-70% by this metric, or in the 25-40% range somewhere if using a thermal generator.
Thinking about it, I like this metric because it really highlights how much more wasteful burning gas to heat a home with electricity is if you're not using the waste heat for something. If you're not using renewable electricity, even heat pumps don't break even if they're not high quality and well maintained.
Really drives home the importance of insulation and good curtains in cold areas.
Edit: looking at absorption heat pumps, they seem to be a little better than my guesstimate. I think they outperform fossil fuel powered electric heat pumps.
Electric heating is about the simplest machine you can possibly make (it's just NiCr wire and a thermostat which is already there), and the cost would almost exclusively be the labour of installation. Even heat pumps (including for water) could be built in relatively short order.
The problem is it would entail quadrupling the electricity generating and transmission infrastructure. This is the hard part that takes decades.
- Large parts of the Uranium are coming from Russia
- Nuclear power is not competitive and nuclear power is very expensive (especially if you conside the costs the government will be left holding the bag on, becuase nuclear power plant companies will spin off their power plants to new companies to go bankrupt once the profiting is done and the cleaning up the nuclear remains starts), no matter how much the pro-nuclear people want to lie about it
- Nuclear power is statistically not dangerous compared to fossil fuels, but not compared to renewables.
- The world's uranium supply is running out. Already since the late 1980s, uranium mines have been unable to meet the world's annual demand. The nuclear industry has so far filled the fuel gap with material from military and civilian stockpiles.
- Nuclear waste is a problem no country except Finnland is anywhere near solving. Germany has been trying to find a permanent nuclear waste storage location since 1999 and have not come closer to finding one since then, because every time the current favorites are revealed the "not in my backyard" screeching starts and local politicials force a restart of the search.
- Many of the world's nuclear power plants are old, because hardly any new ones have been built in ages, because ...
- The construction of nuclear power plants is unbelievably expensive and takes decades, and much of the know-how on how to build nuclear power plants has been lost in europe over the past decades because so few are being built, which drives up the costs even further.
- We still have 7 years of CO2 budget in Germany, so why do some politicians talk about building new ones, although they would only be finished in 20 years at the earliest (and we in DE can't even get the berlin airport built in anything close to the deadline, how long does a nuclear power plant take then ?)
- Budgets for nuclear power plants take budget away from renewables
- We have to change from a centralised to a decentralised grid, nuclear power is a step in the wrong direction
- Nuclear power plants make us dependent on dictators
- Climate change has an impact on reactor operations. With global warming, extreme weather events are on the rise. Unlike renewables, however, nuclear power plants are not adaptable. Rather, their danger increases in our changing climatic conditions.
- Our neighbour france has heavily invested in nuclear power and is is a complete shtshow. There are constant headline to the extend of "Low temperatures caused another french nuclear power plant to go off the grid, worsening the skyrocketing energy prices in france" (The same with "too high temperatures" any many other reasons). Even before the war they had an energy shortage.
The 3 remaining nuclear power plants in germany are: - Emsland (1335 MW) - Isar/Ohu 2 (1410 MW) - Neckarwestheim 2 (1310 MW)
All three are pressurised water reactors and thus not as bad as boiling water reactors, but total rubbish compared to liquid salt reactors.
Moreover, all three have been in operation for over 30 years and all three are due for a "periodic safety review" (every 10 years), which was allowed to be ignored during their last 3 years of operation due to a "grace period under the Atomic Energy Act". If they were allowed to continue running, the operation time extension of the of all three would start with at least one month downtime, because these inspections would have to be started again. These inspections would most likely also reveal necessary repairs, wich would further delay the timeframe.
By the way, all three power plants have not been employing new staff for some time because they knew the would soon be shut down soon anyway.
In short: these nuclear power plants have been preparing for their shutdown since 2011 and have let everything slide over the last few years because everything will soon be demolished anyway. There are not the necessary...
There is no exploration going on to find new uranium deposits because there isn't much willingness to make new mines
Nuclear power is about as safe as wind and solar if looked at per TW. https://ourworldindata.org/safest-sources-of-energy
A nuclear reactor can be built in three years, though admittedly this hasn't happened in Europe. They are mostly (85%) built in under ten years. Figure 3 shows we should expect around 5 years. https://euanmearns.com/how-long-does-it-take-to-build-a-nucl...
Not immutable. There are other sources that are much friendlier
>- Nuclear power is not competitive and nuclear power is very expensive (especially if you conside the costs the government will be left holding the bag on, becuase nuclear power plant companies will spin off their power plants to new companies to go bankrupt once the profiting is done and the cleaning up the nuclear remains starts), no matter how much the pro-nuclear people want to lie about it
I doubt this hyperbolic assertion. Prove it.
>- Nuclear power is statistically not dangerous compared to fossil fuels, but not compared to renewables.
Again, prove it. This is unsupported, and in fact from what I've seen, false. So provide some evidence.
>- The world's uranium supply is running out. Already since the late 1980s, uranium mines have been unable to meet the world's annual demand. The nuclear industry has so far filled the fuel gap with material from military and civilian stockpiles.
This is again, an unsourced claim. In fact, a quick google shows: "There is not now, nor has there even been a shortage of uranium. Fear about reliability of the supply of uranium has been used in the past as an excuse to get something else done." Source: https://www.forbes.com/sites/llewellynking/2020/06/08/uraniu...
>- Nuclear waste is a problem no country except Finnland is anywhere near solving. Germany has been trying to find a permanent nuclear waste storage location since 1999 and have not come closer to finding one since then, because every time the current favorites are revealed the "not in my backyard" screeching starts and local politicials force a restart of the search.
I agree this is a problem, but it isn't one that is unsolvable. It's a cultural issue, not a physical one.
>- Many of the world's nuclear power plants are old, because hardly any new ones have been built in ages, because ... >- The construction of nuclear power plants is unbelievably expensive and takes decades, and much of the know-how on how to build nuclear power plants has been lost in europe over the past decades because so few are being built, which drives up the costs even further.
This isn't inherent, it can change, especially with political need.
>- We still have 7 years of CO2 budget in Germany, so why do some politicians talk about building new ones, although they would only be finished in 20 years at the earliest (and we in DE can't even get the berlin airport built in anything close to the deadline, how long does a nuclear power plant take then ?)
CO2 budgets are now irrelevant currently. China and Russia do not give a shit about CO2 emissions; their energy and GDP are heavily dependent on them. Globalization was the only mechanism that allowed the world to enforce these two countries to behave with emissions, and with the ongoing breakdown of the globalized system, there's no reason they'll reduce emissions. Why cripple Germany's economy to meet a target that the world's largest emitters aren't willing to get anywhere close to?
>- Budgets for nuclear power plants take budget away from renewables
Possible, but renewables have their own downsides, which are well articulated everywhere.
>- We have to change from a centralised to a decentralised grid, nuclear power is a step in the wrong direction
Why?
>- Nuclear power plants make us dependent on dictators
How? How does solar not do the same, in the case of China? 80% of the world's solar panels are made in China, in fact, that rely heavily on the consumption of Coal to produce. Source: fuzzfactor ↗ >- Nuclear waste is a problem
I agree this is a problem too, and this is why people point out there is also a physical issue which transcends culture.
In terms of radioactive properties remaining over a period of millennia during which a culture can be expected to have lost its identity, or been forgotten completely.
If the problem is not truly unsolvable, a permanent solution may still not be possible without close co-operation with a future sympathetic culture.
Yes, there was some anti-nuclear sentiment after Fukushima which made for an opportunity. But it was long in the running. Both the SPD and CSU/CDU had interests here. Lots have been written on this in established media, should you wish to delve deeper.
The Merkel government then stopped it, then resumed it again.
And now Greens try to claim it wasn’t their fault, despite it being the foundation of their party since the mid-1980s.
It was reverted as soon as the CDU took over, and reverted back after Fukushima. But it is originally a "Green" idea and ideology, and it remains to be one today (see: Bavaria trying to get their plants recertified after 2022, because of the gas situation, and Berlin - staunchly Green - fighting it.)
Read up on your history once more. Schröder/Fischer were both voted out of office in 2005.
Let's respectfully disagree here.
Anyway, don't let this cloud your judgement. There are economic issues here, and economics concerns trumps environmental, in Germany and elsewhere. This would have happened even if no anti nuclear campaigning had ever taken place.
In fact, it might even have happened faster if there wasn't also a big push for renewables, which have taken a lot of resources. The people really responsible should answer for this and not some convenient scapegoats.
A non nuclear mix is also cheaper and isnt uninsurable without a catastrophe liability waiver.
The best time to build a nuclear plant is 40 years ago.
Everyone thinks about power like you need one big dam, or one big plant (coal or otherwise). There's a lot of small fast flowing streams that have potential to create extra energy.
I think hydro needs to be reimagined. IT always need to flood valleys to be in the mix.
I actually have no idea how to estimate that. Anyone have a good estimate on that? Intuitively, I'm thinking that most of those rivers are fed by many small streams, so it would be approximately equal. I'm entirely unsure of that though so treat it as having huge error bars.
Sure the water in that creek might be falling hundreds of meters, or even kilometers, but without a dam the height differential at your generator is only going to he a few metres at best. Enough to power the lighting, fridge, and washing machine in the houses that the creeks happen to run by, but not much else.
With the advent of long lasting perovskites and (hopefully) some less polluting battery technologies you're not even better off cost-wise.
You might be able to do something with a long pipe parallel to the creek to get more head, but then you're going to spend a lot of your energy on wall friction unless it's very wide.
Could be, but that's a bunch of stuff you don't have to power with the existing system. Given how many creeks there are, that seems like it could really add up.
> With the advent of long lasting perovskites and (hopefully) some less polluting battery technologies you're not even better off cost-wise.
That's fair. I've learned in my life that I don't have a good intuition for what the costs of large infrastructure projects are.
A nuclear plant will probably have multiple 1GW reactors, with very high capacity factors. I think your numbers are very optimistic.
1. https://en.m.wikipedia.org/wiki/Solar_Star
2. https://en.m.wikipedia.org/wiki/Desert_Sunlight_Solar_Farm
3. https://en.m.wikipedia.org/wiki/Topaz_Solar_Farm
Plus transitioning to nuclear just builds another set of kochs and saudis.
Plus it makes your entire economy beholden to one of China, Russia, France, or the US.
Plus it just kicks the can down the road. If you consider direct thermal forcing. We are exactly where we were in the late 19th century with greenhouse gases. There is no option but to transition to a steady state economy, and starting a bunch of projects that only pay off if you use as much energy as possible from them (and even then, solar + storage will be a fraction of the cost by the time they open) isn't the way to get there.
Plus those same five countries won't even let half the world have nuclear power plants.
Plus the world's uranium reserves won't actually last very long if you carry on with exponential growth (doubly so without reprocessing and breeding).
Then there's all the usual risks people mention.
The solution is the same as it has ever been. Degrowth, stopping waste, and renewables.
Then comes storage, curtailment, and backup (always necessary: fossil-fuel plants always produce around 9% of electricity in fully-nuclearized France).
Moreover backup is now provided thanks to gas turbines, and we know to run them thanks to hydrogen (clean), which can be green hydrogen (cleanly produced thanks to renewable sources overproduction).
Sure. Let me just build hydro dam where there's no hills and dig some geothermal where's no geothermal activity and we're all set!
At any rate you could build nuclear faster than that will take to be ready for market in the best case.
Those benefiting from huge potential for hydro, offshore wind or solar (deserts...) are at an advantage. Those benefiting from a low production time-profile correlation with most other ones also are blessed.
Those totally unable to deploy anything probably don't need huge amounts of energy or are rich to the point of already importing it (is there a counter-example?).
If however Europe can't continue to burn gas and oil when demand exceeds supply because of the weather, then there is a major problem that is going to need fixing in a very expensive and time consuming way. If green hydrogen don't drop in price and no other storage solution can arrive to become cheap than gas and oil, then the climate change goals won't be achieved.
To add to the problem in northern Europe, the locations for hydropower is practically already at maxed utilization. They are also quite old and with large maintenance debts. They are also is causing extinction of several species, and fixing that would cost prohibitively much money, and the solutions will reduce outputs.
The thing is, 5x solar and wind sounds great but if I can specific the time and space for it, I would make a great profit of trading 5 units of energy for 1x at a different space and time. The price difference in northern Europe can be a factor of 10 or even higher between low and high. 5 kwh worth 3 cent each is worth much less than 1 kwh worth 40 cent.
Some added information so: The Green party pushed for an exit of nuclear power as part of a social-docrat government. This exit eas actually pretty well worked out and planned. When Merkel took, one of the forst things was to throw that rather good plan out. Only to revert that decision, hastly at that, after Fukushima. That second nuclear exit, the one Germany is currrently going through, was hastly done, ill planned and rushed.
And lastly, nuclear power does exactly nothing to compensate for reduced gas deliveries. Germany, as in deed a good portion of Europe, is heating with gas. And not nuclear power or electrical.
https://www.cleanenergywire.org/sites/default/files/styles/g...
The amount of flak that purple sliver garners is way disproportionate to its importance - especially since it's not even dispatchable.
Plus germany relies on natgas for a ton more than just electricity. Will we make fertilizer with nuclear power too?
But yeah, people are definitely being a little over dramatic on the severity.
(Yeah it's about that expensive).
Im not sure if shifting that allocation would have been such a good idea though coz theyd now be using even more gas and coal.
Heat is the main challenge and heating alone is problematic all by itself.
Gas dependence was a huge mistake, nuclear is not the short term solution we are looking for and getting away from gas dependence in the past couldn’t have relied on nuclear.
Think heating when you hear gas, not electricity.
Are you able to expound on why this is the case? Are you specifically talking about furnaces that use some kind of oil being very common in Europe?
Also, in an emergency situation, can't nuclear be used for heating, albeit through powering things like space heaters rather than the normal furnaces?
So no, nuclear power cannot be used for heating and Europe definitely doesn't have an electricity problem.
And stop spreading FUD about people freezing to death in there houses in winter, please.
Edit: Assuming a plug in wall-heater does all of that, just how many of them would you need by November this year to change something?
1. Cool, nuclear power, cheap electricity, great.
2. Hmm, looks like sometimes they explode in a pretty rude, nukey way. Maybe we should stick with coal, oil, and gas.
3. Yikes, climate change. But if we pull all our coal/oil/gas plants down we won't have enough energy and prices will skyrocket. Not enough wind/solar/hydro yet.
4. So... maybe nuclear is a good idea again? Cheap electricity?
We're here. So your argument is we can't use nuclear because electricity is too expensive in Europe, when the whole idea is to increase the supply of electricity and thus bring down the price?
> Also, that wall heater doesn't heat your water supply
There are electric water heaters.
> how many of them would you need by November this year to change something
Maybe someone in this thread is arguing that we can both build a bunch of nuclear plants and distribute electrical heaters to people in ~4 months, but I'm not. This is all a long term thing isn't it? Don't we have to do this anyway for green energy?
Also, nobody will freeze to death in his house over this.
Please don't condescend! I agree this is a big job.
> Of course you can heat with electricity, in the case of heat pumps even sustainable. Thing is, there are millions of house holds, commercial and industrial users that have decades of infrastructure in place heating with gas. No way to replace that in mid, let alone short term.
Again we agree. My point is that we have to electrify for green energy anyway. May as well do it, right? Is your argument that we should only ever heat with gas, and electrification is a waste of time and money? Is there enough gas to do that?
> Also, nobody will freeze to death in his house over this.
The thing you're referring to is someone saying "In an emergency situation (a matter of life and death for the vulnerable)". Isn't it reasonable to consider this scenario? Why is it FUD?
Electric heaters are extremely expensive to run relative to gas or heat pumps.
Heat pumps are great and extremely efficient, but not they are as hard to install as air conditioners (because they are air conditioners that work in reverse).
Same with portable air conditioners.
But heat pumps are also available in single units now. They're getting quite popular because they can be self installed (no refrigerant engineer necessary).
Home heating is primarily a luxury for comfort, not survival. Given sufficient insulation, we generate enough heat from food to muddle through.
Is it fun to shiver under blankets during an energy crisis? No, not at all. But are people going to die? Not likely, assuming access to space alien technology like blankets and coats.
Public Health England say:
> The most recent data on fuel poverty in England indicates that there were 2.28 million fuel-poor households in 2012. 5. Cold homes can affect or exacerbate a range of health problems including respiratory problems, circulatory problems and increased risk of poor mental health. Estimates suggest that some 10% of excess winter deaths are directly attributable to fuel poverty and a fifth of excess winter deaths are attributable to the coldest quarter of homes. 6. Cold homes can also affect wider determinants of health, such as educational performance among children and young people, as well as work absences
in the summary at https://assets.publishing.service.gov.uk/government/uploads/...
Excell winter deaths (excluding COVID19) were in the ~29,000 region in 2019, which makes for ~2,900 deaths even though blankets and coats exist.
Europe is still going to have access to gas if Russia cuts its whole supply come winter -- in fact, 60% of the European gas supply will still be present. Probably a bit more, since lots of crisis efforts have been made to provide gas from other sources. Only part of the heating needs have to be replaced.
Let's say Germany still had the, what, 8000 gigawatts of nuclear power online that it has shut down during the last decade? Wild-ass guess, but it's a lot. That's base load, of course. Electric power.
Resistive heating is dirt cheap to deploy in terms of capital costs. You can buy a 2000W heater for $20, perfect for domestic use. So the operating costs dominate. Using a heat pump is 3-4 times better in terms of operating costs; that's not as easy to deploy but many places will already have A/C installed and that's usually the same thing.
So then it becomes a question of economics; many industrial processes cannot be replaced with electricity. But as we've seen, heating of living spaces can easily be done with electricity.
So in the kind of crisis we're discussing here, those thousands of gigawatts of nuclear electricity would be pretty damn useful for emergency heating of German homes and businesses, during months where the gas would be more profitably used for the industrial processes that require it.
It sure as hell wouldn't have been cheap, but it would be cheaper than shutting down half the economy, which is what we're preparing for right now.
It's a moot point, of course, because those ~17 nuclear plants are already shut down. But it would very much have made the issue dramatically less painful.
Population Germany: 80+ million
https://www.reuters.com/business/energy/could-germany-keep-i...
https://www.eia.gov/tools/faqs/faq.php?id=104&t=3
Also probably helpful to think about it on a per person basis. Another comment corrected me that Germany has 80 million people, so let's use that. 8000 gigawatts (8 terawatts) divided by 80 million looks like 8,000,000,000,000 watts / 80,000,000 persons gives you 100,000 watts per person which does not seem realistic. With my air conditioner running at full blast, that's probably just a couple kilowatts, and that covers 3 people. Lights use a few watts. A beefy computer is around 100 watts.
It's possible that Reuters got gigawatts and gigawatt hours confused.
But I don't think it ruins the core of my argument; it wasn't hinging on Germany having reduced their annual power production by 99%. If Germany in fact shut down 15GW of nuclear production (15 plants), that's still on the order of 200 watts for every person in Germany, or one new 1000W resistive heater running 24/7 for every fifth household.
That's the kind of "on the margins" capacity that would indeed make a Russian gas embargo dramatically less painful.
Different types of power have different characteristics. Nuclear power plants runs at constant load and changes in power are slow. They take on the order of days to start and stop, and can not on their own follow load changes on a country wide network.
This isn't good or bad, it just is. They can manage the same base load day every day until they need servicing. But that also means you need other power sources to take the top load. That's usually natural gas turbines, even if it could be other things. Hydro is optimal, but most countries have a limited capacity for that. Which is, somewhat ironically, a similar situation as wind and solar have, but for completely different reasons.
Keep that in mind when people talk about replacing natural gas with nuclear. They do different things.
This mostly isn't physics, but rather a reflection of nuclear power's high capital costs. Nuclear plants have demonstrated that they can ramp up and down pretty quickly compared to e.g. most combined cycle natural gas plants.
https://www.oecd-nea.org/upload/docs/application/pdf/2021-12...
"For example, according to the current version of the European Utilities Requirements (EUR) the NPP must at least be capable of daily load cycling operation between 50% and 100 % of its rated power Pr , with a rate of change of electric output of 3-5% of Pr per minute. " - it goes on to discuss how most modern light water plants significantly outperform this requirement.
"Most of the modern designs implement even higher manoeuvrability capabilities, with the possibility of planned and unplanned load-following in a wide power range and with ramps of 5% Pr per minute. Some designs are capable of extremely fast power modulations in the frequency regulation mode with ramps of several percent of the rated power per second, but in a narrow band around the rated power level. "
> Keep that in mind when people talk about replacing natural gas with nuclear. They do different things.
Having some nuclear base load certainly helps, though, if natural gas is disrupted. Instead of having both the dispatchable power and variable power impacted from reduced natural gas supply, you instead only have a portion impacted.
One strategy is to build a bunch of renewable for during the day. Add some nuclear base load. And then with the surplus power you get sometimes, do power-to-gas with electrolyzer cells. Finally, use natural gas peaker plants and burn natural gas where justified in industry. This is a nice diverse mix with storage.
Yes, last winter France imported a lot, because more than 4 reactors were shut down for maintenance due to corrosions problems that has been found. These problem should had been found earlier, and would allowed to make the maintenance before the winter, but due to covid, inspections have been postponed.
If you look at previous years winter: https://www.rte-france.com/eco2mix/synthese-des-donnees?type...
For example, 01/11/20 to 26/12/20 (their website allow only 8 weeks period graph) you can see that overall France exported a lot of electricity to other EU countries in the middle of the winter.
That is not a law of Physics. Electric heating is perfectly fine. It’s true that we cannot do it quick enough to matter in this case, but that is not a good reason to just shrug and not learn anything from this. We will need a long-term strategy, because even if we manage to come up with a temporary solution, it’s clear that these things will happen again in the future. It’s just too good as a way of applying pressure on European countries. Long term, it will have to be electric if we want to improve our energy supply and have a remote chance of not staying too far from our climate goals.
We should have seen this coming for quite a while. It was in fact predicted, but mostly ignored by politicians who seemed to thing that oil crises from the 1970s were fun and that energy independence was irrelevant.
If a Jumbo crashes you expect around 400 death. If 2 crash into each other it's twice as many (search for Tenerife if you are too young to remember). If you build 2 skyscrapers for 16,000 employees you risk 16,000 deaths if the worst happens ("Less" than 3000 died, so the cold facts aren't that bad after all.) If you build build a nuclear power station with millions of people around, you risk many more deaths. Not everyone of them immediately, but cancers caused by radiation will continue for decades. Building such things is engineer hubris and some day something worse than what we have seen so far will happen.
Dramatic, sure, but nuclear power kills far, far, far fewer people than buckets of water or BIC lighters.
For Chernobyl the overall death toll is estimated between 50 and 4000. Nobody knows and nobody knows how to even count. How do you count the disabled and sick babies born after it?
For Fukushima 1600 fatalities were reported during evacution. I am not an expert, but I guess it's difficult to attribute because the whole area was devastated already by the tsunami.
There will be lucky outcomes also in the future. But if you have hundreds of thousands or millions of people around, some day we'll be out of luck.
> "If you build build a nuclear power station with millions of people around, you risk many more deaths."
Don't build it near millions of people. See this map of the UK[2]; London, Birmingham, Liverpool, Sheffield are where the most people are, and where the nuclear power plants aren't.
[1] https://www.theguardian.com/environment/2021/feb/09/fossil-f...
[2] https://assets.publishing.service.gov.uk/government/uploads/...
"People will die" from this mistake is hysteria. Nobody informed about the energy problems will take that seriously. Gas is not electrical power to start with.
Blaming the greens is internationally some kind of dumb idea that likes to reduce politics to stereotypes. The real effects will be much more subtle and indirect.
Could still end up with the greens losing votes. Currently it doesn’t look that way at all. (German perspective here.)
I don't know about Germany, but it is my impression that opposition to nuclear power was a common theme among the green movement in general for decades.
Obviously their agenda also included investing in renewables, as well as reducing consumption, but that wasn't going to happen fast enough, either for political or technological reasons.
I have voted for the local Greens several times over the last couple of decades even though I disagreed with and was frustrated with the views they held on nuclear power until recently.
I'm also unfortunately familiar with many of the common and overblown negative stereotypes towards the greens in general.
Insofar as nuclear power could have played a part in reducing our dependency on fossil fuels over the lasts couple of decades, though, I don't think it's unfair to say the greens in many countries did a lot to hinder that.
If we’re going for the cheapest option, then why not fuck the planet completely and all burn coal?
There are many parts in Europe where the homes are not heated by gas, but by the waste heat from the local power plants, regardless whether they are gas-based, coal-based or nuclear.
Any existing nuclear plant could be converted to also provide heating for the nearby houses, if the infrastructure of plumbing for the transport of hot water would be built.
However, the last part of the heating infrastructure, where the hot water pipes would have to be passed through the house walls and through the walls of all rooms, would be extremely costly in comparison with an electric heater, even if the operating cost would be lower.
So it is very unlikely that such a conversion would ever be done to already existing houses, even if it is possible.
Heat pumps would have much lower installation costs, while still being more efficient than resistive heaters.
Green parties did not win that much direct power, but they totally won the energy debate and their policies have become the mainstream consensus among European elites.
Over the past years, European governments (not just the German one) have been busy closing down any energy source that was not renewable or relied on imports from other countries.
Now it turns out that renewable energy sources are still not able to cover the basic needs of the population and the economy, and the dependence on imported fossil fuels has allowed an authoritarian government to launch the largest war on European soil since the World Wars.
I don't know if Green parties will actually face a backslash, but it seems clear that the energy transition in Europe will end up making the continent poorer and far less secure in exchange for little, if any, actual benefit for the environment.
In Germany, coal was pushed by the conservatives.
Makes sense.
It has to be said tho that the Green party is doing "realpolitik" now. While they aim at one hand to drastically accelerate renewables, right now they also invest heavily in getting a more secure energy situation in the near future still using a lot of fossil fuels, including rapidly building up LNG terminals and securing deals with parties they previously frowned upon, e.g. a gas deal with Qatar, the government of which the Green party previously heavily criticized for the human rights situation in the country. And e.g. they accepted - with some bickering - the temporary gas (as in petrol) price subventions the other coalition parties wanted, in exchange for temporary public transport price subventions (a 9-Euro regional ticket, that is valid for a month at a time, 21M sold by July 1, population 83M).
They are still rejecting nuclear power generation, neither wanting to build new plants, nor keeping old plants running (the operators of said old plants already called the idea of keeping those plants running "infeasible" to outright "stupid").
It remains to be seen what the blowback will be if inflation doesn't at least slow down, or if autumn and winter come and people start getting cold. Tho right now, the politicians and leading experts and "experts" say, it doesn't look like there there will be a shortage on a scale that gets life-threatening to some people.
[0] 20-24% share in recent polls, vs the 14.8% they actually got in the last election in Sep 2021. They are actually slightly ahead of the SPD (social democrats) in the polls now. The SPD is the majority partner in the coalition.
https://www.wahlrecht.de/umfragen/
It boggles the mind that a so called Green Party is investing in fossil fuels.
All in all, quite reasonable and well thought through under the current circumstances.
The current government that has the Greens as a major coalition partner isn't really investing in new fossil fuel stuff, but replacements of existing fossil fuel stuff. E.g. the LNG terminals are meant to replace the capacity lost from ceased imports from Russia.
Building nuclear now isn't really an option anyway, at least not to deal with the current situation.
The operators of nuclear plants already signaled that running their plants longer is not an option. That would require a lot of investment, and more importantly a lot of time to renovate, modernize and re-certify these things. An effort I believe they said was in the range of 3 or more years.
Building entirely new plants, even with existing designs, would require at least 4 years even on a very expedited schedule.
So in the short term the only option is to keep using fossils - sourced from some place not-Russia. The Greens, while they certainly do not like that, understood this.
Would we Germans be better off if we had some nuclear plants left? Sure. But we'd also be better off if we instead had that energy mix that the Greens envisioned at the start of the century, that entailed renewables at the core, a bit of carbon (mostly from renewable sources, with tech to make it more or less carbon-neutral in totality) and storage, and investments (driven by government incentives) to use less energy in the first place.
If I had to blame anybody, it would be the 16 years of Merkel governments which managed to fuck up both nuclear and renewables, not the Green party.
They were right all along and are now the ones fixing the situation, after only recently being voted into government.
The polls show: The two most popular politicians in germany are both greens. They are the second biggest party in current polls with 22%, 6% behind the biggest party. In the polls they are the biggest party in the current government (when the current term started a few months ago they were the second biggest party in the current government)
Things are going great for them and there are no signs of that changing.
I agree with your sentiment on massive incompetence regarding Energy policy but this is an exageration.
1. Russia won't cut off gas despite it's threats because gas is quite literally one of the few revenue sources for the Russian economy. Much like Qatar, Russia would implode without Gas money.
2. There are plenty of other gas providers Qatar, Norway, Algeria, even US/Canada LNG, who can sell to the EU.
What they likely won't sell is at the cost of Russian gas which is the pressing point for Central and Eastern European countries.
But the point is, you would shut down heavy industry and go into deficit before you were faced with a doomsday scenario of people freezing during winter.
> Russia would implode without Gas money
Russia can sell to China and India. US/CAN has insufficient LNG transport capacity to completely replace pipelines from Russia. Germany has insufficient import terminal capacity.
Yes, they wouldn't run out of gas, but the price would likely spike 5-10x and crater the EU economy which is equally as bad.
Regarding import terminals: there are LNG terminals all over Europe that are far from their full capacity which all have connections to the German net. That alone would suffice in delivering enough LNG. Apart from that, we're on the fast track of having extra terminals ready by autumn.
Also price spikes as massive as those you mentioned will be prevented by emergency government regulation of the market (already announced).
As someone who works in the industry, I have a lot of confidence stating that we will be fine, thank you.
Russia literally shut down Nordstream today for at least 10 days.
Getting paid for gas in Euros or dollars they can't spend is worse than not selling it.
It is also worth noting that Gazprom has already stopped supplying gas to countries and companies refusing to bow to the rubles demand—Poland, Bulgaria, Finland, as well as some customers in the Netherlands, Denmark, and Germany.
Just to be clear despite autocorrect, Russia did not shut down a major western clothing retailer, but the Nord Stream 1 pipeline.
https://www.upi.com/Top_News/World-News/2022/07/11/nord-stre...
German govt bonds are still being purchased by the ECB under QE so it makes sense their yields are suppressed.
He said that we should be more friendly with Russia and that Russia has been trated unfairly. And then said we should buy more gas and oil from the U.S. What do you make of that? Why would you buy LNG from the U.S if Russia is such a great friend and its gas pipes are nearby?
Then went at great lengths to say how Europe is the biggest foe for the United States and not Russia.
Not to mention that fiasco at the Helsinky summit. If you talk a lot of nonsese people stop treating you seriously.
If I remember right he fancied NK leader as well. Just a clown or showmen or whatever you want to call him but definitly a reliable adviser.
Germany has been warned about its dependency on Russian gas by its EU neighbours and past U.S administrations long before that clown. It's just that Germany thought Russia is not completely stupid and made a risky and bad bet. Now it has to pay. It may be for the better because now it can invest in more renewables(i.e has a cleaner slate)
* In 1974, Washington and Riyadh struck a deal by which Saudi Arabia could buy US treasury bills before they were auctioned. In return, Saudi Arabia would sell its oil in dollars—not only enlarging the currency's liquidity but also using those dollars to buy US debt and products.*
[0] https://www.google.com/amp/s/qz.com/2143450/saudi-arabia-wan...
I think there also was the (possibly implied) promise of military protection by the USA
The country which was in midst of protests which their government, dictatorial btw, decided to violently suppress?[7]
Yeah, nice guy all around that Gaddaffi. Oils the only reason anybody would want him gone.
[0]https://en.wikipedia.org/wiki/Pan_Am_Flight_103
[1]https://en.wikipedia.org/wiki/UTA_Flight_772
[2]https://en.wikipedia.org/wiki/Murder_of_Yvonne_Fletcher
[3]https://en.wikipedia.org/wiki/Uganda%E2%80%93Tanzania_War
[4]https://en.wikipedia.org/wiki/Chadian%E2%80%93Libyan_conflic...
[5]https://en.wikipedia.org/wiki/Egyptian%E2%80%93Libyan_War
[6]https://en.wikipedia.org/wiki/Libya%E2%80%93Switzerland_rela...
[7]https://en.wikipedia.org/wiki/First_Libyan_Civil_War
[8]https://en.wikipedia.org/wiki/West_Berlin_discotheque_bombin...
Defensive military alliance - NATO - go!
Gee, I wonder how many similar incidents we can count among NATO states going back from 1988
> So in exchange to gaining access to US treasuries (debt) before action, they had to buy US treasuries?
I have no knowledge about this besides what's been written in this thread, but I assume that having the ability to buy before the auction means they get a good deal.
US forces nearly all countries to buy USD that eventually get returned as SA-owned debt (huge monetary policy benefits). SA gets more or less bribed by the worlds largest military.
Awkwardness is when SA wants to do stuff that’s is against US morals (like murdering journalists) or when China firmly but politely asks to buy in RMB (like it has recently).
US generally sees petrodollar regime as second only to the military (as evidenced by their eagerness to invade Iraq and gain leverage over SA).
Which currencies are as strong or are in a better position, and are backed by stronger economies than the euro?
Easy, initial answers are the Swiss Franc and the Norwegian Krone.
Expanding the thought experiment a bit, it's possible that CAD is, big picture and long term, in even a better position. Probably AUD as well.
The GDP of .ch and .no put together are 6% of the EU's.
I'm sorry, but they just aren't significant in the large picture.
"... are as strong or are in a better position, and are backed by stronger economies ..."
... and I would argue that .ch and .no are in quite a bit better position and are backed by stronger economies.
If the saudi and other arab nations' deals with china and their acquiring of yuans are significant, it could signal the end of the petroldollar.
I highly doubt they will stop using it now, but if any big producers from the middle east stop using the dollar its basically worthless overnight.
At least the euro can't be insta-killed by some dude half-way across the world.
The dollar is on a house of cards, its a dumb way to structure the currency's worth.
Sounds like a propaganda meme, at least for Iraq that I know a little about.
Iraq was invaded for failure to fulfill WMD disarmament requirements, which was known and very _legal_ reason for invasion, according to the agreement made after Desert Storm. Iraq not just failed to prove that it destroyed all WMDs and precursors, it actively and blatantly prevented UN investigations, which is documented in UN resolutions in 1992, 1995, 1996, 1998 and 2002.
Note it's not just US, those are UN resolutions.
The propaganda meme keeps floating around because UN weren't able to find WMD after invasion, but the point is that the reason was not whether they find or not. It was Iraq's responsibility to provide proofs of WMD destruction, but instead they actively interfered with that. Who knows, maybe there are still WMD stockpiles, hidden somewhere in the vast country.
our tiny economy makes no difference to global spasms.
But the flagellatory "everything is terrible and we are merely worms" attitude that prevails among the bien-pensant class right now is so saddening. The UK does have an influence on the world, a pretty outsized one at that, because it is one of the larger and more modern economies. Ahead of it are the US, the world's two most populous nations (China, India), and two comparative economic powerhouses, Germany and Japan. That's it. If you want to count the EU as one economy, great, it takes Germany's place.
Does this mean where Britain goes all must follow? No, of course not. But neither does it mean total insignificance.
* inflation is mostly imported
* cost of living crisis
* incoming recession
So they are under pressure to both try to contain inflation (but see above) and prop up economy.
Couple that with their slow-ish response speed, because the monetary policy committee only meets 8 times a year, and you get a recipe for a lacklustre response. IMHO.
[1] https://techstartups.com/2021/12/18/80-us-dollars-existence-...
They were not. Minor changes to official definitions can make graphs look funny but doesn't change much else https://fredblog.stlouisfed.org/2021/01/whats-behind-the-rec...
Why not? Intuition says that it should. So I think that’s what GP is trying to understand.
It seems like you’ve substituted their model with yours but haven’t explained how yours works.
Velocity [1].
Ignoring it is like sticking a water wheel in the ocean and asking why it doesn’t turn given the depth. Quantity doesn’t turn it. Flow does. And that depends on more than how much water is present.
[1] https://en.m.wikipedia.org/wiki/Velocity_of_money
There's a very simple mathematical identity: MV=PQ
M is money supply, V is velocity, P is price level, and Q is all goods and services.
So if the economy produces the same amount of stuff (Q is constant) and if V falls in the inverse ratio as the increase in M, then the price level will not change.
There is still a lot of inflation outside of energy prices. All of the demand-pull inflation from the pandemic is still there. A weak Euro does not automatically translate to "pushing exports" here. From the article:
>"For years, policy makers have welcomed a weaker currency as a means to stimulate economic growth, since it makes the bloc’s exports more competitive. But now, with inflation in the euro zone at the highest since such records began, its weakness is undesirable as it fans price gains by making imports more expensive. In June, euro-area consumer prices jumped 8.6% from a year earlier. Some policy makers have highlighted a weaker euro as a risk to the central bank’s goal to return inflation to 2% over the medium term, ..."
If the US wanted a total war they could have left that place a toxic wasteland with everything dead for thousands of miles. Instead it appeared to be some lame attempt to capture "hearts and minds" with a completely failed attempt at setting up democracy. Was it a total failure, yup. Was it a stunning military defeat? Nope. Just more M-I-L money burning. Money goes into one side, instruments of death coming out the other.
https://www.xe.com/currencycharts/?from=RUB&to=EUR&view=5Y
https://tradingeconomics.com/russia/foreign-exchange-reserve...
So not sustainable. They are selling foreign currencies to keep the ruble alive.
1. https://www.federalreserve.gov/data/intlsumm/current.htm
2. https://home.treasury.gov/data/us-international-reserve-posi...
I'm not so sure about that. There were a bunch of news outlets warning that Gazprom is on the brink of a massive default. Gazprom, of all companies.
If the company that subsidizes Russia's ruling regime can't make their payments in spite of sitting on a huge pile of oil and gas, that does not bode well for Russia's economy.
As for the Euro, it's currently at a 20-year low, if that's an answer to you. Since the balance of payment is positive, there's probably no reason to be pessimistic in the long term.
The Yen is at a 24 year low vs USD. The Yen is down 15.9% YTD. That is just an incredibly fast erosion and we're only halfway through the year.
Is there a yearly pendulum that I'm not aware of? Because if not, we've also only 21% through the century, and we've barely scratched the millenium.
https://tradingeconomics.com/russia/gold-reserves
Or roughly $128.9 billion USD in gold reserves:
https://www.wolframalpha.com/input?i=2301.64+Tonnes+of+gold+...
https://m.timesofindia.com/business/cryptocurrency/blockchai...
It is far from trivial to move that kind of stock.
There is so much propaganda and "Russia-bad" going around in the media, whether you think it's deserved or not is irrelevant to the quality of journalism taking an extreme nosedive.
Elvira Nabiullina (Russia central bank chair) is IMHO one of the smartest central bankers in the world right now. Much better than "transitory" Powell.
She tried to quit at the end of February but was not permitted to.
Actually it isn't that much of a joke today - according to the new wartime law Russian government can compel any business to produce the amount of product/service the government wants with the business having no right to refuse, and the government can force people to work overtime, weekends, holidays with the government defining what payment, if any, to happen to the business and the people.
Going back to Russia's economy, the future investment is dying. Its airplanes are not getting new parts. Siemens isn't repairing any equipment. The full effects of the sanctions won't hit for another few years.
This only works if you have a developed enough domestic economy to supply everything you need. Assuming you’re exporting more than food, you’ll need resources to produce anything, and if that’s expensive then your theoretically cheap export pricing can’t be so low.
Russia’s domestic suppliers aren’t well rounded, but they do have energy independence which is a major factor going for them.
so before you dismiss all that "propaganda" make sure you don't spread it yourself.
Yes, it means no luxury goods from the EU and no tech from NorthAm. But the embargo isn’t as broad as one might imagine.
There are some important tool and equipment from the EU and NA that if sanctions remain for years could result in a mega Cuba situation where lots of things are under maintained.
Russia has capital controls. Exporters are forced to buy roubles with 80% of their foreign currency, among other restraints to the free trading of roubles.
If you traded roubles on the black market, you'd get the actual price, and it's much lower there.
Edit: also, 80% export rule was lifted recently
This is simply not true. "Black market", in the form of p2p crypto, had the rate close to the official one since the beginning of the war. Check your sources, they might be biased and feed you bullshit
The prices in Russia reflect about 1.5-2x ruble fall against dollar since the invasion. The official ruble/dollar ratio is maintained by draconian measures/restrictions against exporters and population (plus significant depression of economy which was consuming a lot of imports, like the car market falling 6 times because most of the foreign car makers/traders are gone, similar situation in IT for example, ie. Russian economy collapsed to becoming only natural gas and oil pump). Very similar to the situation back in USSR when dollar was only 0.63 of ruble, yet it wasn't possible to buy any dollars at that price.
Wrt. original post - it was obvious even back in February that the faster Ukraine wins the less hit Europe will take. Europe has been dragging its feet on military help for Ukraine and as a result dragging itself deeper an deeper into an economical crisis. Leaders of France, Germany, Italy still seem to hope that Russia will take a piece of Ukraine, and after that the things will be back to the good old times. This naïve thinking has already obviously failed, yet they are still clinging to it.
[0] https://www.bloomberg.com/news/articles/2022-05-17/in-ussr-f...
I actually banked on that a bit, enough to offset losses on other parts of my portfolio.
A massive economic sanctions package, which eliminates their ability to import goods and services while having their sole export stockpile foreign currencies, does help level the balance of trade.
But that does not mean the economy is not tanking though.
Outside of Russia, nobody will take your ruble. In Russia, somebody may, but that's not going to be a bank and the actual cost will be much steeper than advertised rate.
(US dollar skyrocketed to almost 100 ruble in March until Russian government decreed its officially worth 60 except now you basically can't legally buy western currency. HODL mode I guess?)
I say this only because I have a sizable amount of rubles from an earlier trade, and *I have no way to exchange them for USD despite the exchange rate.*
The price you see is a reflection of the price accepted by those able and willing to trade rubles which is currently *a limited subset of the world*. Sure, they have a massive trade surplus due to the commodity shortage, but a lot of the move is engineered through capital controls.
(1) Western Ruble electronic trading is dead. It's near impossible to move rubles with any size. [https://www.risk.net/our-take/7946561/russian-ruble-trading-...]
(2) Moscow is forcing companies to buy rubles.
(3) Moscow limited the amount of dollars that Russians could withdraw from foreign-currency bank accounts and barred banks from selling foreign currencies to customers. [https://www.wsj.com/articles/russias-economy-is-tankingbut-t...]
(4) Moscow has fixed the price of gold. [https://www.kitco.com/news/2022-03-28/Russia-sets-fixed-gold...]
So really, the "appreciation" you see is compensating you for the headache you'll have to go through to do anything meaningful with rubles.
Meanwhile, Russian inflation is at 15% and GDP is collapsing. Russian imports have collapsed because *no one really wants rubles*.
It appears to not have crossed exactly 1 yet.
(I'm not a currency trader, though...)
dropping below 1 will drop the "psychological barrier" then they all end up spooking each other into more selling
I guess currency traders are having a good day today or did at some stage.