4 ms·

The thing about "short term screwed" is that in some countries the "screwed" is actually "people having to pay more than 100 % of their income for electricity".

The thing about "short term screwed" is that in some countries the "screwed" is actually "people having to pay more than 100 % of their income for electricity". Theoretically, long term, this could all work out nicely and steer more people and governments towards renewables and decentralized generation, but the short term consequences are starting to look brutal.

locallost 4y ago
No, we agree here. I'm not trying to minimize the impact. Factories will shut down, leading to job loses, shortages which will again cause inflation etc. But we can't change that anymore. What we can do is build more capacity.
- pclmulqdq 4y ago
  We can also change policy to make sure we don't get into this kind of situation again. We, as a world, don't seem to want to do that.
- sofixa 4y ago
  > Factories will shut down, leading to job loses, shortages which will again cause inflation etc Not necessarily. The same thing (forced closures of factories) was handled gracefully without job losses during the pandemic through various unemployment schemes. I see no reason why the same can't happen again.
  - pclmulqdq 4y ago
    Those schemes are responsible for tremendous inflation which is part of the reason why energy prices are high compared to incomes today. There is no free lunch.
    - sofixa 4y ago
      They might have contributed, a bit (all they did was replace income from salaries with equivalent income in unemployment money, and cover some enterprise's expenses; the only monetary difference was coming from those who used to spend a lot of money going out to bars and stuff, who couldn't anymore), but let's not kid ourselves. The main reason for the booming inflation is Russia's invasion of Ukraine and resulting boom in prices of many raw materials, including very important ones like foodstuffs and energy, which are factored in the prices of pretty much everything. I don't understand the people who are hell bent on ignoring that and pinning all the blame on monetary policy. If you really want to blame someone, blame Putin.
      - pclmulqdq 4y ago
        Several prominent economists at Harvard looked at inflation in countries that did and didn't send out stimulus checks. The numbers ranged from 4% to 8%, with stimulus checks strongly correlating with higher inflation. The math disagrees: there was going to be high inflation due to the pandemic and the Ukraine war, but stimulus policies accounted for the majority of the damage.
        sofixa 4y ago
        Do send out the study. The fact that you're talking about stimulus checks means either you or them are talking about the US, which couldn't be farther in how it handled the pandemic from the EU, which is the topic of the discussion. There are no checks here, we aren't stuck in the past. And all was handled at another layer by preventing layoffs by covering payroll and other expenses for companies instead of allowing layoffs and then sending checks through the mail like it's the 1950s. And yes, the delayed spending and the some extra money will result in inflation, of course. But the impact from the prices of all sorts of crucial raw materials is probably much higher.
- origin_path 4y ago
  There is obviously another option that people don't want to point out - start buying Russian gas again. The idea they're resisting to sell it is wrong. There's a whole pipeline lying idle ready to go the moment sanctions are lifted. People are acting like this is a natural crisis. It's not, it's an artificial one created by political choices. This will lead to political extremism as voters realize they are freezing or bankrupted because politicians like "standing with Ukraine" more than they like their own citizens. Not every politician will be like that. Some will say, we send weapons and it's not our war anyway. Citizens first, foreigners second. And suddenly that will be mainstream politics.
  - anticristi 4y ago
    > start buying Russian gas again I'm afraid Europe bought a one-way ticket. Dependence on Russian energy is no longer a hypothetical issue, but a demonstrated concern. Freezing is not great, but giving the thermostat back to Putin is worse.
  - timeon 4y ago
    > There is obviously another option that people don't want to point out - start buying Russian gas again What I think is more likely is that coal is back on the menu.
jillesvangurp 4y ago
I expect some major support programs will be put in place to address this. And it will probably involve a bit of money printing. No sane government is going to let its citizens deal with going bankrupt because of massively higher energy prices. So Germany, France, etc. will do whatever needs doing to prevent that. The real problem will be industry having to shut down or minimize operations. They'll be the ones bearing the real cost. This winter will be brutal in terms of its economical impact on industry. The next one, countries will be better prepared. It's Russia that will be suffering the consequences long term. I doubt any country in Europe wants to ever be dependent on them again to the extent that they have in the past.
- sph 4y ago
  > I expect some major support programs will be put in place to address this. And it will probably involve a bit of money printing. One of the two Tory lunatics^Hhopeful candidates for PM confirmed there's not much they can do to ease the energy price crisis without creating a massive hole in the British budget. But that's what countries will have to do, and it's not going to be pretty. The Western world just went on a massive printing spree two years ago because of COVID, a further temporary injection of capital and 2008 will pale in comparison to the next recession.
- Sakos 4y ago
  I've seen a report or two talking about how fertilizer plants are being shutdown or run at reduced capacity across Europe because of gas costs. Electricity is the least of our problems.
  - chewz 4y ago
    Oh, It is much more then just fertilizer plants. Fertilizer plants stoped this week all over EU. (Yara Norway, Azoty Poland etc.) The moment you stop fertilizer plants you stop supplies of CO2 and NO2 industry gases and that stops dairy plants, meat factories, breweries etc... Basically you stop food production and distribution. And after cows get culled and you have 2-3 years before production can come back to initial levels. It is going to be rather tough decade for Europe.... And not just Europe... Europe’s Energy Crisis Threatens Glass Production https://www.wsj.com/articles/europes-energy-crisis-threatens-glass-production-11661598180?mod=hp_lead_pos10 https://www.wsj.com/articles/europes-energy-crisis-threatens... There’s a Carbon Dioxide Shortage, and Food and Drink Makers are Scrambling https://www.wsj.com/articles/food-beverage-companies-race-to-keep-plants-running-during-wide-co2-shortage-11661527088?mod=hp_lead_pos12 https://www.wsj.com/articles/food-beverage-companies-race-to...

locallost 4y ago

No, we agree here. I'm not trying to minimize the impact. Factories will shut down, leading to job loses, shortages which will again cause inflation etc. But we can't change that anymore. What we can do is build more capacity.

pclmulqdq 4y ago
We can also change policy to make sure we don't get into this kind of situation again. We, as a world, don't seem to want to do that.
sofixa 4y ago
> Factories will shut down, leading to job loses, shortages which will again cause inflation etc Not necessarily. The same thing (forced closures of factories) was handled gracefully without job losses during the pandemic through various unemployment schemes. I see no reason why the same can't happen again.
- pclmulqdq 4y ago
  Those schemes are responsible for tremendous inflation which is part of the reason why energy prices are high compared to incomes today. There is no free lunch.
  - sofixa 4y ago
    They might have contributed, a bit (all they did was replace income from salaries with equivalent income in unemployment money, and cover some enterprise's expenses; the only monetary difference was coming from those who used to spend a lot of money going out to bars and stuff, who couldn't anymore), but let's not kid ourselves. The main reason for the booming inflation is Russia's invasion of Ukraine and resulting boom in prices of many raw materials, including very important ones like foodstuffs and energy, which are factored in the prices of pretty much everything. I don't understand the people who are hell bent on ignoring that and pinning all the blame on monetary policy. If you really want to blame someone, blame Putin.
    - pclmulqdq 4y ago
      Several prominent economists at Harvard looked at inflation in countries that did and didn't send out stimulus checks. The numbers ranged from 4% to 8%, with stimulus checks strongly correlating with higher inflation. The math disagrees: there was going to be high inflation due to the pandemic and the Ukraine war, but stimulus policies accounted for the majority of the damage.
      - sofixa 4y ago
        Do send out the study. The fact that you're talking about stimulus checks means either you or them are talking about the US, which couldn't be farther in how it handled the pandemic from the EU, which is the topic of the discussion. There are no checks here, we aren't stuck in the past. And all was handled at another layer by preventing layoffs by covering payroll and other expenses for companies instead of allowing layoffs and then sending checks through the mail like it's the 1950s. And yes, the delayed spending and the some extra money will result in inflation, of course. But the impact from the prices of all sorts of crucial raw materials is probably much higher.
origin_path 4y ago
There is obviously another option that people don't want to point out - start buying Russian gas again. The idea they're resisting to sell it is wrong. There's a whole pipeline lying idle ready to go the moment sanctions are lifted. People are acting like this is a natural crisis. It's not, it's an artificial one created by political choices. This will lead to political extremism as voters realize they are freezing or bankrupted because politicians like "standing with Ukraine" more than they like their own citizens. Not every politician will be like that. Some will say, we send weapons and it's not our war anyway. Citizens first, foreigners second. And suddenly that will be mainstream politics.
- anticristi 4y ago
  > start buying Russian gas again I'm afraid Europe bought a one-way ticket. Dependence on Russian energy is no longer a hypothetical issue, but a demonstrated concern. Freezing is not great, but giving the thermostat back to Putin is worse.
- timeon 4y ago
  > There is obviously another option that people don't want to point out - start buying Russian gas again What I think is more likely is that coal is back on the menu.

jillesvangurp 4y ago

I expect some major support programs will be put in place to address this. And it will probably involve a bit of money printing. No sane government is going to let its citizens deal with going bankrupt because of massively higher energy prices. So Germany, France, etc. will do whatever needs doing to prevent that. The real problem will be industry having to shut down or minimize operations. They'll be the ones bearing the real cost. This winter will be brutal in terms of its economical impact on industry. The next one, countries will be better prepared. It's Russia that will be suffering the consequences long term. I doubt any country in Europe wants to ever be dependent on them again to the extent that they have in the past.

sph 4y ago
> I expect some major support programs will be put in place to address this. And it will probably involve a bit of money printing. One of the two Tory lunatics^Hhopeful candidates for PM confirmed there's not much they can do to ease the energy price crisis without creating a massive hole in the British budget. But that's what countries will have to do, and it's not going to be pretty. The Western world just went on a massive printing spree two years ago because of COVID, a further temporary injection of capital and 2008 will pale in comparison to the next recession.
Sakos 4y ago
I've seen a report or two talking about how fertilizer plants are being shutdown or run at reduced capacity across Europe because of gas costs. Electricity is the least of our problems.
- chewz 4y ago
  Oh, It is much more then just fertilizer plants. Fertilizer plants stoped this week all over EU. (Yara Norway, Azoty Poland etc.) The moment you stop fertilizer plants you stop supplies of CO2 and NO2 industry gases and that stops dairy plants, meat factories, breweries etc... Basically you stop food production and distribution. And after cows get culled and you have 2-3 years before production can come back to initial levels. It is going to be rather tough decade for Europe.... And not just Europe... Europe’s Energy Crisis Threatens Glass Production https://www.wsj.com/articles/europes-energy-crisis-threatens-glass-production-11661598180?mod=hp_lead_pos10 https://www.wsj.com/articles/europes-energy-crisis-threatens... There’s a Carbon Dioxide Shortage, and Food and Drink Makers are Scrambling https://www.wsj.com/articles/food-beverage-companies-race-to-keep-plants-running-during-wide-co2-shortage-11661527088?mod=hp_lead_pos12 https://www.wsj.com/articles/food-beverage-companies-race-to...