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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

• ceeplusplus 4y ago
  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.
  • Flatcircle 4y ago
    Not building/using nuclear is almost criminal negligence. People will die from that mistake.
    • nivenkos 4y ago
      We can use coal for electricity, the issue is natural gas itself for industry and domestic heating.
    • throwaway290 4y ago
      People are dying from that mistake. FTFY
    • berkes 4y ago
      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.
      • chitowneats 4y ago
        Famously, France does and Germany does not. This wasn't just some accident. Germany and their Green Party chose this.
        • hef19898 4y ago
          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.
      • fmajid 4y ago
        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.
        • semigroupoid 4y ago
          The shutdown was essentially started when Angela Merkel, who is a member of the conservative CDU, was chancellor.
    • pydry 4y ago
      I look at this graph and think many things but "oh god if theyd just kept the nuclear plants switched on everythin would be ok" isnt one of them: https://www.cleanenergywire.org/sites/default/files/styles/gallery_image/public/paragraphs/images/fig1-installed-net-power-generation-capacity-germany-2002-2021.png?itok=k2BK48jz 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?
      • MisterPea 4y ago
        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.
        • pydry 4y ago
          They probably could be producing 30GW of nuclear energy by now if they'd spent as much as they did on 58GW from solar and 56GW of wind combined. (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.
    • outside1234 4y ago
      Yes - but you can be assured they won't be Germans - so no policy change needed!
    • arrrg 4y ago
      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. Think heating when you hear gas, not electricity.
      • logicalmonster 4y ago
        > Can’t heat with nuclear. Not in a way that’s relevant for this, anyway. 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?
        • hef19898 4y ago
          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.
          • logicalmonster 4y ago
            In an emergency situation (a matter of life and death for the vulnerable) can't space heaters be powered by electricity then?
            • hef19898 4y ago
              Short answer no. Unless someone comes up woth a scalable domestic heating version, using electricity, of AWS. And stop spreading FUD about people freezing to death in there houses in winter, please.
              • 4y ago
    • skrause 4y ago
      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.
      • katbyte 4y ago
        10%+ of electrical generation is “almost none”?
        • skrause 4y ago
          Yes, because all of Germany's electricity is only around 21% of its energy needs. The heat sector is more than twice of that.
        • hef19898 4y ago
          Yes.
    • usr1106 4y ago
      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.
      • caeril 4y ago
        How many people died or were injured (even medically, long after the fact) from Three Mile Island? Dramatic, sure, but nuclear power kills far, far, far fewer people than buckets of water or BIC lighters.
        • usr1106 4y ago
          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.
    • raxxorraxor 4y ago
      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.
  • mjfl 4y ago
    will this have political blowback for the 'Green' parties?
    • DSingularity 4y ago
      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.
      • arrrg 4y ago
        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.)
        • Delk 4y ago
          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.
  • RandomLensman 4y ago
    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.
    • ceeplusplus 4y ago
      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.
      • RandomLensman 4y ago
        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.
  • DoingIsLearning 4y ago
    > 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.
    • ceeplusplus 4y ago
      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.
      • hef19898 4y ago
        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.
      • rawfan 4y ago
        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.
  • kyleblarson 4y ago
    Reminds me of the German UN delegates smugly laughing at Trump when he said that dependence on Russian oil is a bad thing: https://www.youtube.com/watch?v=FfJv9QYrlwg https://www.youtube.com/watch?v=FfJv9QYrlwg
    • theplumber 4y ago
      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)
    • davrosthedalek 4y ago
      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.
      • int_19h 4y ago
        It also gave Russia the opportunity to use Syria as a testing ground.
  • halffaday 4y ago
    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.
• olivermarks 4y ago
  The US dollar and and offshore petrodollar are the world reserve currency. The euro is just another second tier currency backed by the european central bank which is extremely fragile. https://mobile.twitter.com/MkBlyth/status/1529934213897764879 https://mobile.twitter.com/MkBlyth/status/152993421389776487...
  • RC_ITR 4y ago
    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.* [0] https://www.google.com/amp/s/qz.com/2143450/saudi-arabia-wants-to-sell-its-oil-in-yuan-not-dollars/amp/ https://www.google.com/amp/s/qz.com/2143450/saudi-arabia-wan...
    • seanmcdirmid 4y ago
      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?
      • Someone 4y ago
        They also got US aid (economic and weapons). See https://www.nytimes.com/1974/06/09/archives/milestone-pact-is-signed-by-us-and-saudi-arabia-acclaimed-by.html https://www.nytimes.com/1974/06/09/archives/milestone-pact-i.... I think there also was the (possibly implied) promise of military protection by the USA
        • notlukesky 4y ago
          There was the threat of military action and regime change if they didn’t. See Libya and Iraq after they decided to sell oil in Euros.
• nly 4y ago
  The Bank of England started raising rates before the Fed
  • jamiek88 4y ago
    We’re talking about economies that make a difference. our tiny economy makes no difference to global spasms.
    • humanwhosits 4y ago
      UK is the same economic size (gdp) as california. The per-capita doesn't matter here
      • phonebanshee 4y ago
        That just illustrates how important California is to the world economy.
    • deleted 4y ago
      [deleted]
    • svachalek 4y ago
      UK is a G7 country. It's small compared to the US and China but nobody else.
      • MaysonL 4y ago
        Quite a lot smaller than the EU…
        • deleted 4y ago
          [deleted]
    • Nursie 4y ago
      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.
• grecy 4y ago
  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? [1] https://techstartups.com/2021/12/18/80-us-dollars-existence-printed-january-2020-october-2021/ https://techstartups.com/2021/12/18/80-us-dollars-existence-...
  • thunderbird120 4y ago
    >80% of all US dollars in existence were printed very recently 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-recent-surge-in-the-m1-money-supply/ https://fredblog.stlouisfed.org/2021/01/whats-behind-the-rec...
  • ideamotor 4y ago
    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-never-printed-money-part-i https://seekingalpha.com/article/4113280-federal-reserve-nev.... Note: I found another seekingalpha “article” referencing techstartups.com too hah!
  • panarky 4y ago
    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.)
    • ghiculescu 4y ago
      > "printing money" doesn't automatically make money worth less.) 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.
• bogomipz 4y ago
  >"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, ..."
• homeland221 4y ago
  • ByteJockey 4y ago
    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?
  • int_19h 4y ago
    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.
  • klipklop 4y ago
    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.