by Michael
Things are starting to get really crazy in Germany. Germans are facing the worst inflationary crisis they have seen since the days of the Weimar Republic, and meanwhile economic activity is starting to shut down across the country. Of course, other European countries faced similar problems, but Germany was supposed to be the economic rock that the rest of Europe could always depend on. Unfortunately, the Russians’ decision to cut off the flow of gas through the Nord Stream 1 pipeline is hitting Germany extremely hard. If we could get both sides to agree to end the war in Ukraine, that would help a lot, but that’s just not going to happen. Indeed, it seems that Vladimir Putin has decided to escalate matters greatly, and the Western powers will inevitably escalate matters in response. This means that the economic crisis we are witnessing in Europe is not going anywhere anytime soon.
This week, we got some inflation numbers from Germany that are so high it’s hard to believe they’re real…
German producer prices rose in August at the fastest pace since records began in 1949, data released today by the Federal Statistics Office showed, pointing to a further rise in consumer prices .
Production prices for industrial products rose 45.8 percent compared to the same month last year. Compared to July 2022, prices increased 7.9 percent.
Rising energy prices in the wake of Russia’s war against Ukraine remains the main driver of price increases.
If we continue to see monthly increases around 8 percent, by this time next year we could be talking about an annual jump close to 100 percent.
Wow!
How bad do things have to get before you start using the term “hyperinflation”?
Energy prices are the main reason why inflation has completely spiraled out of control, and the German government has been forced to nationalize a major natural gas company to prevent it from collapsing…
The German government is closing in on a deal to nationalize gas giant Uniper SE, as Berlin moves to prevent a collapse of the country’s energy sector.
According to sources familiar with the situation, a provisional agreement has been reached between the government, Uniper and its main shareholder, the Finnish Fortum Oyj. Although no contracts have been signed, Berlin is aiming for an announcement later this week.
According to Uniper’s CEO, the company has been losing around 100 million euros a day during this crisis.
It goes without saying that the German government cannot save everyone, and therefore many companies will not survive this crisis at all.
For example, a manufacturer that has been making toilet paper for Germans for almost 100 years is headed for insolvency…
Hakle has been a German household name since 1928, but the Düsseldorf-based toilet paper maker said all it took was this summer’s gas price shock. to drive it into insolvency.
Unfortunately, this is just the beginning.
According to the German central bank, the nation is moving towards a “broad and prolonged decline in economic output”…
“Economic activity may fall back a little this quarter and they are noticeably reduced in the autumn and winter months,” the central bank said, adding that it did not forecast this adverse scenario in a June report.
Bundesbank continued: “There are growing signs of recession in the German economy in the sense of a clear, broad and prolonged decline in economic output.” It said a contraction is expected in the third quarter with deeper declines in economic activity in the fourth.
“High inflation and uncertainty regarding energy supply and costs affect not only the intensive gas and electricity industry and its export and investment businesses, but also private consumption and service providers who depend on it,” the central bank said.
You can refer to this scenario as a “recession” or “depression” if it makes you feel better.
I call it economic collapse.
The US economy will soon experience immense turmoil as well.
According to billionaire Barry Sternlicht, the Fed’s extremely stupid policies are pushing us into a “severe recession”…
In an interview on CNBC’s “Squawk Box” on Thursday, Barry Sternlicht, chairman and CEO of Starwood Capital, said he believes Americans are facing a major recession if the Federal Reserve continues with several more rate hikes. rate as a means of curbing inflation, which is said to be the central bank’s plan.
“The economy is slowing down hard,” Sternlicht told the financial press, according to the Daily Caller. “If the Fed continues like this, they’re going to have a serious recession and people are going to lose their jobs.”
He’s right, but instead of saying “people will lose their jobs”, he should have pointed out that many people are already being laid off. This is something I’ve been documenting on my website for quite some time, and this week we learned that Gap has decided to lay off hundreds of corporate workers…
Gap Inc. is cutting about 500 corporate jobs as the clothing retailer struggles with declining sales.
The job cuts, which include open positions, will be primarily at Gap offices in San Francisco, New York and Asia and will affect multiple departments, a representative for the retailer confirmed Tuesday. The moves were first reported by The Wall Street Journal.
Ouch.
In this environment, very few workers are truly safe.
Right now, even the entertainment industry is letting go of a lot of people…
The struggling film and television industry continues to grapple with bad news. This week it was reported that Warner Bros. Discovery was laying off 100 TV ad marketers at the same time Paramount is considering ending Showtime’s offering as a standalone service, Bloomberg reported.
Netflix followed suit with its own layoffs, the report says. The company has reportedly let go of hundreds of employees and vacated some of its office space. At the same time, the company’s stock price has collapsed, falling more than 60% from its all-time highs.
In 2008 and 2009, millions of Americans lost their jobs.
Will we see something similar in the coming months?
And just like during the “Great Recession,” the housing market is starting to slow down. In fact, we just learned that homebuilder confidence has fallen for nine months in a row…
Single-family homebuilder confidence fell again in September, the ninth consecutive month of declines, “as the combination of high interest rates, persistent disruptions in the construction material supply chain and high prices for houses continue to affect affordability. ,” the NAHB report said.
With today’s index value of 46, the NAHB/Wells Fargo Housing Market Index is now below where it was in May 2006, en route to the recession. housing
This time, it won’t just be some areas of the planet that suffer.
Right now we are literally witnessing economic implosions across the planet, and the stage is being set for an immensely painful 2023.
The only thing that could really change things would be peace.
Unfortunately, world leaders on both sides seem absolutely determined to drag us into the kind of cataclysmic global conflict I’ve been warning about for years.
So there will be no peace, and that means things will be very bad in 2023 and beyond.
But I also think you were put at this particular point in history for a reason.
It is when times are darkest that the greatest good can be done, and that is something we will all have to remember during the very dark times ahead.
