#136 Going Dark

“War... Huh…

What is it good for?

Absolutely nothing, say it again!“

Good Morning Everyone,

German electricity prices are hitting fresh all time highs and at the same time Poland’s largest chemicals company has halted production of nitrogen fertilisers and reduced output of ammonia due to soaring gas prices. As we know you can print more fiat, but you can’t print more energy. The complacency that exists in respect to the energy crisis really is profound to witness and it’s hard not to see this situation becoming exponentially worse.

German Electricity:

Dutch Natural Gas:

While Germany is definitely toward the eye of the storm, most others throughout Europe are entangled in this mess and depending on each countries individual energy production capabilities, should expect to be impacted in similar ways to varying degrees.

This image below from Javier Blas shows electricity costs throughout Europe with many nations paying in excess of €600 per MWh. Where as pre 2020 anything above €75-100 was considered expensive! Incredible.

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This tweet from @MacroAlf helps hammer the point home even further if it weren’t already brutally clear.

This madness is a direct result of insane and catastrophic centrally planned energy policy and it very likely leads to a widespread famine throughout Europe. It also has the potential to be the event that breaks the European Union apart and kicks off monumental conflicts between the neighbouring states, and in turn potentially, the world, as the effects of this begin to really hit home for individuals and families.

Absolutely everything is downstream of energy. Once energy costs increase enough the predictable dominos begin to fall. We are starting to see this play out with Poland’s fertilizer production being halted. The dominos do not stop there, however.

Nitrogen fertilizer is necessary for food production. If the production of this continues to be impacted or more production comes off-line, this naturally leads to less supply being available. It means the price goes up as there is less supply to meet demand. This leads to reduced food production which only further amplifies the problem. And would trigger further disruptions to the already shambolic food supply chains and even more acute price increases for consumers. Once again, i see a negative feedback loop and the scent of Moloch at play.

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This forces governments even further into a corner; the likely output of this is rationing!

It’s hard to believe that over the last 30 years we’ve gone from having widespread abundant and reliable energy to now staring down the barrel of the most phenomenal energy crisis of our life time.

Having written about the potential of a mass starvation event eight months or so ago, it’s absolutely bizarre to see this playing out, almost like it is some kind of train wreck happening in slow motion. On one hand I’m bewildered as to to why governments would not pivot and adjust course more evasively in the face of what, at this point, appears to be the most likely outcome, but then i’m reminded it is just humans at scale following the paths of least resistance. It is simply the incentives manifesting into human behaviour.

This problem is not likely to be fixed by the people who have created it. This is a systems level issue, and the issue has been cause by the people with the admin privileges. Awarding them further administrative privileges in the face of this would be akin to the definition of insanity - which is to do the same thing, and expect a different outcome.

This issue will not be solved by following morons in perceived positions of power off the cliff. It is certainly not solved by printing more fiat money, which will almost certainly happen in the event rationing and price controls are initiated to attempt to treat the symptoms instead of the root cause, in the typical naive interventionist fashion we have come to expect.

Personal responsibility and a bitcoin standard is at the core of our solution. Adopting a monetary standard free of those who have either a bizarre desire to intentionally drive us toward catastrophe, or who are simply cognitively deficient and should be appropriately ignored. We must focus on building circular economies based on the superior monetary standard bitcoin provides and cultivate community. Connecting producers direct with consumers in a peer-to-peer fashion, and work to be as energy and food independent as possible in an effort to insulate ourselves, our families and our communities from the actions of malevolent or mere incompetent actors.

You never want to wait to buy the option when you need it. You need to buy the option before you need it!

Community is the ultimate hedge against uncertainty.

Hope you have a great day. I’ll talk to everyone tomorrow.

AK

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