Posted September 13, 2023
By Matt Insley
Germany Annexes Boiler Rooms
I apologize for the late Rundown today.
Major thunderstorms moved through the Baltimore area last night, causing a power and internet outage at chez Insley.
But here goes…
Responding to Monday’s issue, Taylor S. writes: “A few years ago, I needed to upgrade my gun safe for more storage. I was very interested in Liberty, and had heard them advertised on Rush Limbaugh regularly. At the time, I couldn't afford a Liberty and decided to purchase a cheaper Chinese made safe instead.
“The day I heard the news about Liberty caving to the FBI was the first day I was genuinely happy with my purchase. If I owned the Liberty, I would probably be sending it the way of many Yeti coolers, filling it with gasoline and shooting it from a distance with an American-made rifle.”
Heh, please don’t try this at home, kids
Now, on to our story today…
Almost one year ago, Paradigm’s macro expert Jim Rickards stuck his neck out with this prediction: “Saying Germany is going to have a severe economic contraction is an understatement.”
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Your Rundown for Wednesday, September 13, 2023...
Quit Your “Jammern”!
“Germany is the fourth-largest economy in the world,” but because of the energy crunch caused by Russian sanctions, Jim said, the country will have to “shut down its manufacturing.
“You shut down manufacturing, and not only are you depriving the rest of the world of finished goods, you’re sinking the German economy, since much of the country’s GDP is pegged to net exports,” he said.
However, Germany’s power trippers — er, politicians — would hear none of it.
In fact, once the powerhouse economy of the European Union, everyday Germans have been experiencing a depressing trifecta. According to Germany’s Statistisches Bundesamt in 2022:
- 20.9%of the population living in poverty
- 14.7%of the population “at risk” of poverty
- 9.7%living in a household “with very low work intensity”
Lest you think circumstances have improved in 2023, The Wall Street Journal reports: “Adjusted for inflation and purchasing power, wages have declined by about 3% since 2019 in Germany.”
“Germany's lower house of parliament passed a bill on Friday on phasing out oil and gas heating systems,” Reuters says.
“The bill, part of Germany's drive to become climate neutral by 2045… [means] heating systems installed in new developments and in old buildings located in areas with a municipal heating plan will have to run on 65% renewable energy.
“The renewable energy boiler switch requirement will not take effect until municipalities submit their binding heating plan, which is not expected before 2026 in smaller districts and 2028 in larger ones.”
If that’s as clear as mud to you, reader, imagine the mental jiu jitsu required of your average German citizen, trying to figure out how in the world he’s going to pay for a new heating system.
“Conservative opposition lawmakers said the new law would… be a burden on people's wallets and complained about too many bureaucratic requirements to get government subsidies,” says Reuters.
But even the ESG gang is “jammern” about the bill, admitting “renewable energy heat pumps such as hydrogen and biomass were too expensive and risky for consumers.”
“Finance Minister Christian Lindner said the new version [of the bill] was practical and open to technology.”
He even “X-tweeted”: “[The bill] is no longer a law that people should be afraid of because the state climbs into their boiler room.”
Another control freak and power tripper saying: Germany’s economy isn’t dead yet? No? Shh, this’ll be over soon enough.
In other words, a “second sweater” isn’t going to fix what’s broken in Germany and, indeed, the rest of the EU.
Market Rundown for Wednesday, Sept. 13, 2023
The S&P 500 is up 0.25% to 4,470.
Oil is up 0.50% to $89.30 for a barrel of WTI.
Gold is down 0.30% to $1,912.50 per ounce, according to Kitco.
And Bitcoin is up 0.40% to $26,200.
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