Dear manager,
What the game is behind the September 25 vote is clear to all. Only Luigi Di Maio had not understood that. And indeed, having guaranteed the terms of the Chambers’ dissolution, he will now remain with his 50 desperate people, match in hand and no alliance. There is at least a fund of justice.
The fact remains that, like it or not, these elections are being rigged to make the PD and various centers win, eliminating the more or less organic five stars from the map and, most notably, the centre-right into the blow up. The conditions set by the ECB for access to the so-called anti-spread shield are in reality configured as an anti-centre-right shield: as soon as there is talk of budget deviation, Fornero law, land register or patrimonial in the opposite sense to the Desires from Brussels, the entrance from Frankfurt will cause the spread to skyrocket.
And if on the one hand this guarantees the center-left propaganda engine zero-cost gas, on the other hand it opens up the most extreme, but not impossible on paper, scenario: access to the ICC before the September 25 vote in order to arm itself against the policies of the next government. Whoever emerged victorious from the polls.
On the other hand, yesterday the confirmation came from the front page of Engineer De Benedetti’s newspaper, whose title for once corresponded to reality: after the elections, the government program will be that of the ECB. Clearer and more honest than that, you die. And be careful, because nobody wants to admit that our debt really is now traveling without a network, in case the ECB wants to make it dance. The anti-spread shield does not exist. If you want you have to accept the commissioner. Otherwise, the only line of defense is reinvesting Pepp stock, which has kept us on the waterline since July 1st until now. Little, very little. From the simple fact that its effectiveness was based on the placebo effect guaranteed by the expectation of the anti-spread shield: which, having proved itself to be nothing more than the ESM, now no longer fulfills this task on the market becomes.
But the ECB is a company and as such it closes for at least a two-week holiday in August. And the reinvestment of securities is not an emergency program: that is why it is being stopped. And when BTP, guaranteed perhaps by some centre-right exponent’s impromptu campaign promises, is in the mood for beach grandeur, what is done? Indeed, who will do it? The man who takes care of daily events until September 26th. That is, Mario Draghi. Do you want to see the Draghi government, although resigning, preparing a backlog capable of continuing its agenda for at least a full term?
It wouldn’t be surprising. And don’t be surprised. Because the situation is really unprecedented. And not just in Italy, where voting will take place for the first time since the end of the Second World War. And not even for the sidereal speed with which the Quirinale dissolved the chambers and imposed its moral conviction on the Jewish community, since September 25 is the new year for this religion. No problem, since we only celebrate from the evening, the answer reached the wishes of the highest mountain. How much haste. The same, however, characterizes the albeit tacit abandonment of the Ukrainian car and the reorientation of European foreign policy towards the Kremlin.
And gentlemen, there is a reason. If Nord Stream hadn’t restarted, we would be breaking new ground today. Indeed, a UBS report has included a market-level worst-case scenario of an almost complete halt to capital flows: according to the Swiss bank, the risk to Europe would lie in a 15% fall in corporate earnings, a sell-off the Stoxx 600 is expected to report 20%, a euro 90 cents to the dollar and the yield on ten-year Bunds 0%. Gentlemen, the apocalypse was (almost) served. It is much more serious than the climatic one of the eponymous heat wave that is burning the Old Continent from north to south, but which, paradoxically, risked driving the proverbial nail in the coffin of the EU recession, as these two images show, which preceded the Illustrate and detail the course of the Rhine and its essential contribution to the energy supply of Northern Europe, starting from the so-called ARA node (Amsterdam-Rotterdam-Antwerp) and to Switzerland for a course of 1,300 kilometers, the strategic node of which is in Germany at the Kaub site.
The second picture speaks for itself: the drought that hit the Rhine allows a carrying capacity of 30% of the maximum total, according to today’s data from the shipping brokerage firm Riverlake. So a maximum of 800 tons from Kaub to the south. And if this section of the river is essential for a number of commodities, it seems fatal for diesel and heating oil.
That said, if Avenergy Suisse has confirmed that Switzerland is already beginning to address systemic bottlenecks in energy supplies from the northern European gateway, the dry Rhine and logistical difficulties faced by German rail following the pandemic are already affecting the operations of many factories. Two power plants of fundamental importance to Germany’s energy-intensive industry, such as the power plants in Mannheim and Karlsruhe managed by Großkraftwerk Mannheim and EnBW, have confirmed the difficulty of finding coal for industrial use. Additionally, the latest report from S&P’s Global Commodity Insights predicts that Germany will only have 65% of capacity tied to coal in the coming months.
In short, if Nord Stream had not restarted and the flows from Russia had really stopped completely, today we would be in a nightmare that could turn 2008 into a walk in the park. But be careful, because the damage that has been done to the German economy so far is severe. Very difficult. Evidence of this is the evaporation of the trade surplus. And up there, rationing continues, also in view of the refusal of Spain and Greece to limit the EU Commission’s emergency plan by 15% by spring 2023.
Revenge of the Pigs vs Penalty Taker Boss? Certainly Athens and Madrid are not well-disposed towards Berlin. But they can afford it because their industries are not sub-suppliers to the German ones, neither for machines nor for components. But what about Northern Italy instead? It should be noted that, despite overcoming the worst in the fall, the enormous damage to the German economy is spilling over to ours in terms of orders. And they will do so in the most productive, healthy, and dynamic part of our economy.
Gentlemen, the vote of September 25 counts for nothing. Everything is already decided. Because otherwise you will skip the system. And this time not because of the cicada countries’ debts, but because Germany sawed off the branch it was sitting on. We have never experienced such times. At least we’ll have something to talk about one day. Of course we already feel sorry for Merkel and Weidmann today. At least the undersigned.
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