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Rationing Has Already Started In Europe As The Entire Globe Plunges Into A Horrific Economic Nightmare

July 1, 2022

Rationing Has Already Started In Europe As The Entire Globe Plunges Into A Horrific Economic Nightmare

If countries in Europe are already beginning to ration certain things due to “supply problems”, how long will it be before it starts happening in the United States? Up until the past couple of years, many of us in the western world always considered shortages to be something that only “unsophisticated” poor countries on the other side of the planet had to deal with. But the last couple of years have shown us that painful shortages can happen to wealthy countries in the western world too. At first we were told that they were “just temporary”, but the months went by and we just kept having more shortages. In fact, in 2022 “supply problems” have become so serious that many supermarkets in Europe have been forced to strictly ration essential items at various times. For example, it was being reported that due to the war in Ukraine flour, sunflower oil and sugar were all being rationed by stores in Greece…

After limiting the sale of some flours and sunflower oil online, Greek supermarkets are turning to rationing the sale of sugar as well, now including in their stores, over supply problems.

The AB Vassilopoulos is setting a maximum limit on the purchase of all brands of corn and sunflower oil and of flour per customer while Mymarket put a ceiling on sunflower oil purchases and Sklavenitis has added sugar to the rationed sales of corn oil through its online store, with a maximum of four packs, the products in high demand from restaurants, some of which said they have to stop selling french fries and other fried foods.

…click on the above link to read the rest of the article…

Cheap Mediterranean Natural Gas Could Spell the End for the NATO Alliance

September 13, 2020

Cheap Mediterranean Natural Gas Could Spell the End for the NATO Alliance

It’s a strange and unprecedented spectacle when countries like Israel, Greece, Egypt, Libya, Turkey, and others lay claims over the Mediterranean, while NATO scrambles to stave off an outright war, among its own members.

The North Atlantic Treaty Organization (NATO) is an alliance in name alone. Recent events notwithstanding, the brewing conflict over territorial waters in the Eastern Mediterranean indicates that the military union between mostly Western countries is faltering.

The current Turkish-Greek tension is only one facet of a much larger conflict involving, aside from the two Mediterranean countries, Israel, Egypt, Cyprus, France, Libya and other Mediterranean and European countries. Notably absent from the list are the United States and Russia; the latter, in particular, stands to gain or lose much economic leverage, depending on the outcome of the conflict.

Conflicts of this nature tend to have historic roots – Turkey and Greece fought a brief but consequential war in 1974. Of relevance to the current conflagration is an agreement signed by Israeli Prime Minister, Benjamin Netanyahu and his Greek and Cypriot counterparts, Kyriakos Mitsotakis and Nicos Anastasiades, respectively, on January 2. The agreement envisages the establishment of the EastMed pipeline which, once finalized, is projected to flood Europe with Israeli natural gas, pumped mostly from the Leviathan Basin.

Several European countries are keen on being part of, and profiting from, the project. But Europe’s gain is not just economic but also geostrategic. Cheap Israeli gas will lessen Europe’s reliance on Russia’s natural gas which arrives in Europe through two pipelines, Nord Stream and Gazprom, the latter extending through Turkey.

Gazprom alone supplies Europe with an estimated 40% of its natural gas needs, thus giving Russia significant economic and political leverage. Some European countries, especially France, have labored to liberate themselves from what they see as a Russian economic chokehold on their economies.

…click on the above link to read the rest of the article…

An appropriate European Union response to tensions in the Eastern Mediterranean

September 1, 2020

An appropriate European Union response to tensions in the Eastern Mediterranean

If the European Union can mediate effectively to resolve current Greek-Turkish tensions over energy in the Eastern Mediterranean, it could also provide an opportunity to tackle more deep-rooted problems.

The European Union is seeking to mediate in a naval confrontation on its doorstep, in the Eastern Mediterranean, which involves NATO partners Greece and Turkey, as well as EU member Cyprus. EU foreign ministers are discussing the issue and, without de-escalation, sanctions against Turkey could be implemented. But so far, the two most powerful EU nations have adopted a ‘good cop, bad cop’ approach that conveys different and confusing messages – and has not prevented escalation. Chancellor Angela Merkel, with the added authority of holding the EU’s six-month revolving presidency, has launched a German initiative to prevent escalation, reduce tensions and overcome longstanding conflicts. But French President Emmanuel Macron, while not eschewing mediation, has opted for a show of force, sending French naval vessels into disputed waters to counter the presence of Turkish warships.

Deep-rooted dispute

The dispute is ostensibly over ownership of offshore gas deposits and the delimitation of 200-mile exclusive economic zones (EEZs).

Turkey has sent exploration vessels and warships into waters claimed by Greece and Cyprus and begun drilling for gas. Despite its 1,600 kilometre Mediterranean coastline, Turkey is the only Eastern Mediterranean state without internationally recognised rights to offshore resources in the area because nearby Greek islands and Cyprus have secured the right to generate EEZs under the United Nations Convention on the Law of the Sea (UNCLOS). Turkey is one of fifteen UN members that is not a party to UNCLOS, and Ankara insists that Turkey’s continental shelf gives it ownership rights that take priority over the UNCLOS-backed claims of Cyprus and Greece.

…click on the above link to read the rest of the article…

Turkey Rejects US & EU Calls To Cease East-Med Gas Drilling As Greece Threatens Military Action

July 26, 2020

Turkey Rejects US & EU Calls To Cease East-Med Gas Drilling As Greece Threatens Military Action

Days after the US State Department warned Turkey over its gas reserves exploration and drilling plans in waters between Cyprus and Greece, which Athens has declared ‘illegal’ given it cuts into Greece’s Exclusive Economic Zone (EEZ), the European Union has also put Turkey on notice, warning it could move forward with sanctions.

French President Emmanuel Macron said late this week that it’s “not acceptable for the maritime space of a European Union member state to be violated or threatened” and called for sanctions if it moves forward. On Tuesday a US State Department statement demanded that Turkey back down from its drilling plans which have put the Greek Navy on “high alert” – given Turkish exploration ships are already in or near Greek waters.

Greek media sources are now reporting that Turkey through its embassy in Washington DC has informed the Americans that it plans to proceed unimpeded with its drilling research with the Oruc Reis vessel in the disputed eastern Mediterranean waters. Turkey’s seismic exploration ship Oruc Reise in the Eastern Mediterranean this week, via Anadolu Agency.

“We urge Turkish authorities to halt any plans for operations and to avoid steps that raise tensions in the region,” the statement said. And Greece’s foreign ministry said it clearly violates the country’s sovereignty and that it stands ready to defend its territory.

Turkey has so far rejected all demands from the US, EU, Greece and Cyprus that it back down. Turkey’s Daily Sabah newspaper cited President Erdogan’s office as follows:Turkey rejects Greece’s “maximalist” objectives in the Eastern Mediterranean, which lack a legal basis and disregards logic, Presidential Spokesperson Ibrahim Kalın said Thursday.

Kalın highlighted that Turkey opposes the rhetoric of threats and favors an equal distribution of resources.

…click on the above link to read the rest of the article…

Greece To Help Tripoli ‘Block Turkish Ships’ As Libyan War Spills Into Mediterranean

December 14, 2019

Greece To Help Tripoli ‘Block Turkish Ships’ As Libyan War Spills Into Mediterranean

The years-long war for post-Gaddafi Libya now threatens to spill over into the Mediterranean as Turkey and Greece line up on either side of the conflict. Each side is now threatening the others’ allied ships in southern waters after a controversial maritime deal expanded Turkish claims off Libya’s coast.

On Thursday Benghazi-based General Kalifa Haftar declared his Libyan National Army has begun its “final decisive battle” to wrest control of the capital of Tripoli from the UN-backed Government of National Accord (GNA).

“Zero hour has come for the broad and total assault expected by every free and honest Libyan,” Haftar said in a televised address, reports Al Jazeera. “Today, we announce the decisive battle and the advancement towards the heart of the capital to set it free… advance now our heroes.” Beginning eight months ago Haftar launched a siege of Tripoli, which has been stalled in recent months.

*Drilling vessel Yavuz is escorted by a Turkish navy frigate in the Eastern Mediterranean off Cyprus, via Daily Sabah.*

Turkey has been the closest military supporter to Tripoli’s GNA, even recently signing a controversial maritime agreement, after providing heavy weaponry to repel Haftar’s assault. Last summer the LNA even attacked Turkish naval ships, in what’s an ongoing declared war with any Turkish vessel or aircraft. This “proxy war” element is now threatening to involve Greece.

Days ago Erdogan confirmed his country signed a bilateral memorandum, finalized on Nov. 27, which would allow Turkish forces to enter Libyan territory or waters at the request of the GNA authorities.

“With this new agreement between Turkey and Libya, we can hold joint exploration operations in these exclusive economic zones that we determined,” Erdogan said. The agreement established a continental shelf and Exclusive Economic Zone (EEZ) boundary line of 18.6 nautical miles between the two countries.

…click on the above link to read the rest of the article…

Broke Bond Markets Mounting: Italy Surpasses Greece As Europe’s Riskiest Sovereign

November 10, 2019

Broke Bond Markets Mounting: Italy Surpasses Greece As Europe’s Riskiest Sovereign

As yields soar optimistically around the world, pushing negative-yielding debt below $12 trillion – the lowest since June, but hey, it’s still $12,000,000,000,000 of insanity, central-planners’ incessant meddling with global markets has sparked another WTF-moment in capital market history.

A mere twelve trillion dollars worth of nonsense debt remains…

China Corporate Bond Defaults Nearing a Record

And, as The FT reports, for the first time since 2008, Greece has lost the dubious distinction of being the riskiest government borrower in the eurozone after its bond yields dipped below Italy’s…

Greek bonds have soared this year as investors hungry for yields have snapped up debt from former euro area crisis spots — a trend that gained further momentum after S&P’s upgraded Athens’ credit rating to BB- late last month.

As FT notes, the small size of Greece’s bond market – much of its enormous debt load is in the form of low interest loans to the EU and IMF following a series of bailouts – means there is less immediate pressure on government finances compared with Italy, which relies solely on markets to refinance its own huge debt pile.

“We still hold some Greek bonds based on our view that the economy has bottomed,” said Chris Jeffery, a fixed-income strategist at Legal & General Investment Management.
“But much more important is the debt structure. There are very few cash flow requirements for the next five years. With Italy, you always have the rollover risk.”

5Y Greek bond yields topped 60% in early 2012, they are now below 0.50%!!

Finally, as the chart above shows, Italian debt has also performed strongly during the summer’s global bond rally, but some investors remain wary due to the effects of last year’s political tensions.

…click on the above link to read the rest of the article…

For The First Time Ever, Greece Issues Negative Yielding Debt

October 10, 2019

For The First Time Ever, Greece Issues Negative Yielding Debt

As armies of fixed income strategists battle over whether US Treasuries are facing higher or lower yields, Greece has no such qualms and in a historic shift today, the former bond market pariah and Eurozone’s most indebted nation, joined the exclusive club of negative-yielding European nations when bond investors lined up to pay the nation that was at the heart of Europe’s sovereign debt crisis.

A sale of €487.5 million of 13-week bills on Wednesday drew Greece’s first-ever negative yield of minus 0.02% as investors now pay Athens for the privilege of lending it cash, as Bloomberg first reported. Greece joins the likes of Ireland, Italy and Spain – not to mention virtually all core Eurozone nations – which benefit from the ECB’s insane monetary policy and deepening fears of a global recession.

It’s been an unprecedented turnaround for twice bankrupt Eurozone member, whose bondholders suffered massive losses back in March 2012 when the country was forced to accept the biggest bond restructuring in history, bringing the Eurozone to the verge of collapse.

Just a few years and several trillions in bond purchases by the ECB later, the region is grappling with an altogether different problem – the spread of negative yields, which reduces borrowing costs for governments in a form of soft default, one which is crushing savers, pension funds and insurers, and which has prompted some of the most respected names in finance to shriek in terror as the cost of money in even Europe’s most insolvent nations is now negative.

Jon Day, a fixed-income portfolio manager at Newton Investment Management, said the move was “another symptom” of the “global grab for yield, especially in euro-denominated bonds,” pointing out that short-dated Greek bonds were previously one of the few government markets where a positive return was on offer.

…click on the above link to read the rest of the article…

Thucydides Trap & War Between China & USA

October 2, 2019

Thucydides Trap & War Between China & USA

QUESTION: What do you make of Trump’s proposal to restrict US investment in China? Will this send the US economy into recession as everyone is saying?

ANSWER: I have never seen the press so anti-president in the history of this nation. Every possible thing they claim will destroy the US economy. The US trade with China will by no means send the US economy into a deep recession. However, blocking US investment into China would send the Chinese economy down even harder.

This style of analysis always reduces the future trend to one simple event. The markets and the world economy are far more complex than a single event. This is the entire problem with Western Analysis – it is always linear and never cyclical. This is the same problem as Global Warming. They see a 1-degree rise, project that out for 50 years, and then assume the trend will remain the same – linear analysis. They always project the future in this manner and NEVER look at the trends in history to learn what are the “real” possibilities from similar events.

What you must understand is they often call this type of struggle between the current superpower (Financial Capital of the World) and the rising power to take that title, the Thucydides Trap. This is named after the ancient Greek historian Thucydides who wrote about a war that devastated the two leading city-states of classical Greece – Sparta & Athens.

Thucydides explained: “It was the rise of Athens and the fear that this instilled in Sparta that made war inevitable.”

While Thucydides provided his opinion, there was another backdrop to this war which he did not cover. Looking at this from an economic issue, it was the ancient clash between Capitalism and Communism. Sparta never issued coins whereas the Athenian Owl coins became the international currency recognized even in barbarian regions.

…click on the above link to read the rest of the article…

The Dying Days Of An Empire

June 27, 2019

The Dying Days Of An Empire

Caravaggio **Conversion on the way to Damascus** 1600-01

Something’s been nagging me for the past few days, and I’m not sure I’ve figured out why yet. It started when Donald Trump first called off the alleged planned strikes on targets in Iran because they would have cost 150 lives, and then the next day said the US would do sanctions instead. As they did on Monday, even directly targeting Trump’s equal, the “Supreme Leader Khameini”.

When Trump announced the sanctions, I thought: wait a minute, by presenting this the way you did, you effectively turned economic sanctions into a military tool: we chose not to do bombs but sanctions. Sounds the same as not doing a naval invasion but going for air attacks instead. The kind of decisions that were made in Vietnam a thousand times.

However, Vietnam was all out war (well, invasion is a better term). Which shamed the US, killed and maimed the sweet Lord only knows how many promising young Americans as well as millions of Vietnamese, and ended in humiliating defeat. But the US is not in an all out war in Iran, at least not yet. And if they would ever try to be, the outcome would be Vietnam squared.

Still, that’s not really my point here. It’s simply about the use of having the world reserve currency as a military weapon instead of an economic one. And I think that is highly significant. As well as an enormous threat to the US. The issue at hand is overreach.

While you could still argue that economic sanctions on North Korea, Venezuela and Russia are just that, economic and/or political ones, the way Trump phrased it, comparing sanctions one on one with military strikes, no longer leaves that opening when it comes to Iran.

…click on the above link to read the rest of the article…

Europe’s Debt Crisis: Challenges for the Left, Confronting the Creditors

January 24, 2019

Europe’s Debt Crisis: Challenges for the Left, Confronting the Creditors

Second part of the interview given to LVSL. Here, the first part:

The Doctrine of Odious Debt. Break the Taboo on Odious Debts and Their Repudiation

LVSL: If we look at the case of Greece in 2015, we see that there was a change of regime when Syriza and Alexis Tsipras came to power, with strong popular support. And yet in the end, Tsipras downplayed and ignored the work of the Truth Committee on Greece’s Public Debt, which you worked for. What are the political factors that interfered with this movement towards a possible repudiation of a portion of Greece’s debt?

Eric Toussaint: Yes, it’s obviously extremely important to analyse the case of Greece. In fact it was simply a matter of Alexis Tsipras being unable to adopt a strategy that was appropriate to the actual context in which Greece found itself. If you look at the Thessaloniki Programme presented in September 2014, which is the platform on which he was elected in January 2015 (see the excerpts from the programme in my article), there was a whole series of very important commitments in it that included a radical reduction of the debt. There were measures that would have brought about radical changes concerning the brutal austerity measures that were being taken, the privatisations, and the way in which the Greek banks had been bailed out. As Prime Minister, Tsipras took an approach that was not at all consistent with his programme and with the commitments he had made.

But what is extraordinary, and absolutely needs to be underlined in Tsipras’s case, is that a few days after he was elected in January 2015 and formed his government, before he had taken any measures whatsoever, on 4 February the ECB cut off the normal flow of cash to Greece’s banks (see this and this).

…click on the above link to read the rest of the article…

Here’s What an American Economic Collapse Could Actually Look Like (And How It May Be a Lot Different Than Folks Expect)

January 15, 2019

Here’s What an American Economic Collapse Could Actually Look Like (And How It May Be a Lot Different Than Folks Expect)

When we think of “economic collapse” our imaginations usually lead us immediately to the desperation we’ve witnessed in places like Venezuela or Greece. We think of starvation, a complete lack of medical care, and waves of suicide by people who simply can’t survive. We imagine an apocalyptic societal breakdown that is immediately visible.

Here in America, I suspect the collapse is going to look a lot different than it has in these other countries…at least, at first. And in my description, it’s entirely likely you’ll see that many of these signs have been happening all around us for years.

It will be gradual.

The thing with collapses that we see in the media is that we are seeing the end results of events that have been slowly declining for years. Venezuela was one of the wealthiest countries in the world back until the mid-1980s, due to their rich oil reserves. Then oil prices collapsed and their fall began. It was actually several decades though before it was truly evident that the country was in trouble.

Preparedness bloggers here have been sounding the warning bell since 2008 (at least) when our economy went into a recession. While the US managed to dig its way out of that to at least an illusion of renewed prosperity, it’s questionable how much of that return was real and how much of it was propaganda.

It’s unlikely that we’ll see just one event that says clearly to everyone, “Hey, our economy has collapsed. The Great Depression 2.0 has arrived, today, January 14, 2019, due to X event.”

…click on the above link to read the rest of the article…

The Delusional Leaders of the Eurozone

January 2, 2019

The Delusional Leaders of the Eurozone

I was looking forward to chilling with family and friends in Sydney this New Years Day, but Phil Dobbieruined it for me with this tweet:

I had forgotten that this was the 20th anniversary of the start of the Euro. But the Eurocrats in Brussels hadn’t. Some hours before the New Year commenced, Juncker and friends put out a press release extoling the virtues of the Euro. Virtues such as “unity, sovereignty, and stability … prosperity”.

Well so much for New Year cheer. With this one tweet, the EU put 2019 on track to be even worse than 2018. Using anyof those words to describe the Euro—apart perhaps from “unity”, since the same currency is used across most of continental Europe now—is a travesty of fact that even Donald Trump might baulk at.

Sovereignty? Tell that to the Greeks, Italians or French, who have had their national economic policies overridden by Brussels. Stability? Economic growth has been far more unstable under the Euro than before it, and Europe today is riven with political instability which can be directly traced to the straitjacket the Euro and the Maastricht Treaty imposed. Prosperity? Let’s bring some facts into Juncker’s fact-free guff.

I’ll start with Phil’s point about Greece. Greece’s GDP has fallen at Great Depression rates since the Eurozone imposed its austerity policies on it, and nominal GDP today is more than 25% below its peak.

Figure 1: Greek GDP and economic growth rate

Now of course that could be blamed on the Greeks themselves, so let’s look compare economic growth in the entire Eurozone to the USA (minus Ireland and Luxembourg, since in the former case their data is massively distorted by data revisions, and the latter has highly volatile data as well, and is so small—under 600,000 people—that it can safely be ignored).

Figure 2: Real economic growth rates

…click on the above link to read the rest of the article…

The Mediterranean Pipeline Wars Are Heating Up

December 28, 2018

The Mediterranean Pipeline Wars Are Heating Up

Things have been quite active in the Eastern Mediterranean lately, with Israel, Cyprus and Greece pushing forward for the realization of the EastMed pipeline, a new gas conduit destined to diversify Europe’s natural gas sources and find a long-term reliable market outlet for all the recent Mediterranean gas discoveries. The three sides have reached an agreement in late November (roughly a year after signing the MoU) to lay the pipeline, the estimated cost of which hovers around $7 billion (roughly the same as rival TurkStream’s construction cost). Yet behind the brave facade, it is still very early to talk about EastMed as a viable and profitable project as it faces an uphill battle with traditionally difficult Levantine geopolitics, as well as field geology.

The EastMed gas pipeline is expected to start some 170 kilometers off the southern coast of Cyprus and reach Otranto on the Puglian coast of Italy via the island of Crete and the Greek mainland. Since most of its subsea section is projected to be laid at depths of 3-3.5 kilometer, in case it is built it would become the deepest subsea gas pipeline, most probably the longest, too, with an estimated length of 1900km. The countries involved proceed from the premise that the pipeline’s throughput capacity would be 20 BCM per year (706 BCf), although previous estimates were within the 12-16 BCm per year interval. According to Yuval Steinitz, the Israeli Energy Minister, the stakeholders would need a year to iron out all the remaining administrative issues and 4-5 years to build the pipeline, meaning it could come onstream not before 2025.

The idea of EastMed was first flaunted around 2009-2010 as the first more or less substantial gas discovery in the Eastern Mediterranean, the Tamar gas field in Israel’s offshore zone, paved the way for speculations about an impending gas boom.

…click on the above link to read the rest of the article…

Macron Heralds The End Of The Union

December 7, 2018

Macron Heralds The End Of The Union

Paul Almasy Paris 1950

The concept of the EU might have worked, but still only might have, if a neverending economic boom could have been manufactured to guide it on its way. But there was never going to be such a boom. Or perhaps if the spoils that were available in boom times and bust had been spread out among nations rich and poor and citizens rich and poor a little more equally, that concept might still have carried the days.

Then again, its demise was obvious from well before the Union was ever signed into existence, in the philosophies, deliberations and meetings that paved its way in the era after a second world war in two score years fought largely on the European continent.

In hindsight, it is hard to comprehend how it’s possible that those who met and deliberated to found the Union, in and of itself a beneficial task at least on the surface in the wake of the blood of so many millions shed, were not wiser, smarter, less greedy, less driven by sociopath design and methods. It was never the goal that missed its own target or went awry, it was the execution.

Still, no matter how much we may dream, how much some of the well-meaning ‘founding fathers’ of the Union may have dreamt, without that everlasting economic boom it never stood a chance. The Union was only ever going to be tolerated, accepted, embraced by its citizens if they could feel and see tangible benefits in their daily lives of surrendering parts of their own decision making powers, and the sovereignty of their nations.

…click on the above link to read the rest of the article…

A new flashpoint in the Mediterranean deepens the conflict between Turkey, Cyprus and Greece

November 1, 2018

A new flashpoint in the Mediterranean deepens the conflict between Turkey, Cyprus and Greece

The conflict over gas in the eastern Mediterranean is intensifying. In February, the first case of intervention by the Turkish navy took place in the Exclusive Economic Zone (EEZ) of Cyprus. Last month, two more flashpoints have appeared.

The dispute concerns gas blocks, i.e. areas into which waters around Cyprus have been divided. Turkey does not recognize the government in Nicosia or its agreements regarding EEZ. Ankara thinks that the right to extract gas should also be exercised by the Turkish Cypriots and also by Turkey in the case of Blocks 4, 5, 6, and 7, through which – according to Ankara – passes the Turkish maritime border (the map below).

At the beginning of October, Cyprus put gas extraction in the disputed Block 7 out to tender,¹⁾ which the Gefira Team has informed about.²⁾ In response to this, in the middle of the same month, Turkey sent an exploration ship assisted by four naval vessels and began exploration in the area of 44 thousand km2, including blocks 4 and 5.³⁾ Nicosia and Athens consider it a violation of the Exclusive Economic Zone of Cyprus.⁴⁾ On October 18, another event took place. Greece reported that the Turkish ship had entered the Greek continental shelf, which provoke Athens to send the frigate Nikiforos to drive the Turks out.⁵⁾

[Location of the Turkish research ship Barbaros Hayreddin Pasa in October 2018 in the disputed area in the Eastern Mediterranean. Source: Marine Traffic]In the vicinity of the disputed waters, exploration is carried out by, among others, Italian Eni, French Total and American ExxonMobil. When the Turkish Navy stopped an Eni research vessel in the EEZ of Cyprus in February, Rome decided to send a frigate.…click on the above link to read the rest of the article…

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