Off The Cuff.

Some stream of consciousness from me.  

 

Now Submerged.

Thanks to Nikolay Petrov who pointed this out. In Russian there is an expression кучно пошло (it went closely-grouped, or heap) and Severodvinsk in one go, evidently, launched 3M22 Zircon while submerged.  The missile performed as is expected and hit the target.

But believe me, even this will not convince Western "experts" that Zircon is being deployed now, we all know that Western "experts" know it better than Russians themselves. They cannot forecast shit but they still know better. The interesting thing will be when not just Gorshkov-class frigates will begin to deploy (if not already) 3M22 but when project 949A (Oscar-II) SSGN Irkutsk will finish her modernization to pr. 949AM and will carry said Zircons, apart from P-800 and Kalibrs. These subs will be able to carry up to 72 missiles in containers and who knows what and how many on the shelves for torpedo tubes. Irkutsk is going to Pacific Fleet which is being strengthened constantly and appearance of new Yasens with pr. 949AMs and other Zircon carriers (such as pr. 20385 corvettes) and  combined with air assets such as MiG-31K armed with Kinzhals and TU-22M3M getting them Russia solves the problem of making her Pacific approaches stretching deep into the ocean zone a completely forbidden zone for any surface force. 

In related news. The news of the first pipe of Nord Stream 2 being filled with gas eased prices for gas in Europe but it is still "controversial". Denmark, evidently, decided to give permission (finally) and Ted Cruz--a loser from Texas with a permanent butt-hurt from public not appreciating his narcissistic nature and not electing him POTUS--is basically sabotaging already pretty much dead American diplomacy because of that. 

Why is Cruz doing this? He is opposed to Biden’s actions regarding the Nord Stream 2 gas pipeline project that would run between Russia and Germany while bypassing Ukraine. The senator believes by allowing the pipeline to go forward, as Biden did when he waived sanctions Congress placed on the project, that the president is showing “weakness” toward Russia. Thus began Cruz’s intentional delays of even the most routine Biden nominations. Cruz is accomplishing this by objecting to the traditional way Congress handles these nominees, through “unanimous consent.” With his objections, Cruz forces the process to take hours of Senate floor time.

What a teenage loser. But then again, don't expect any class from the American politicos. But in general, they are worthy of each-other in Congress. Reaching for a bag of pop-corn...

3M22 Zircon Launched From Severodvinsk SSGN.

Russia's MoD informed (in Russian) that Severodvinsk, the lead submarine of Yasen-class, successfully launched hyper-sonic missile 3M22 Zircon which confirmed all of its parameters and hit the target.  Judging by the video, Zircon was launched from surfaced Severodvinsk, so launches from beneath the waves are coming. 

The obvious conclusion is that Zircon flies well, and performs as expected, which means that it will first see deployment (as was expected) on surface ships and later on subs. But that is not what attracted my attention. Suddenly this news is "breaking news"

Russian President Vladimir Putin has ordered the government to decide whether it is viable to limit the spending of the Russian sovereign wealth fund in view of expected lower oil and gas revenues in the energy transition in the coming decades. Russia's National Wealth Fund (NWF) holds some $190 billion in assets, most of which are liquid assets from revenues of oil and gas. Current legislation allows Russia to spend money from the fund above a threshold of assets equal to 7 percent of gross domestic product (GDP) held by the fund. Putin, however, wants the government to say by October 15 if the country should amend the legislation to put the minimum assets held by the fund before any spending at 10 percent of GDP. This would potentially restrict spending from the fund. Putin's proposal comes after the Russian finance ministry said that the energy transition could dent Russian oil and gas revenues and threaten the country's finances within a decade, Reuters reporter Darya Korsunskaya notes.

As is expected, maroons from Western media outlets, including Russia's native ignorant journos who do not know shit from shinola,  rely on what Russian finance ministry "said"--the statement which was already ridiculed and completely debunked by energy specialists with actual degrees and experience in energy sector (not in "finances") and against the background of an astronomic spike in prices for natural gas, LNG and coal, which China is siphoning today from markets like there is no tomorrow. That is why EU doesn't get what it needs in terms of...pretty much anything, while China's "sparsely" populated (only 100 million people, wink, wink) three North Eastern provinces are facing shutdowns in electricity and heat supply. Hundreds of industrial plants have been shut down completely or ordered to operate on a reduced schedule. It is the energy apocalypse in China and recall my table from the last post--China is in red with a severest energy deficit for such a colossal economy. Add here misguided attempts on "green" energy and voila'. 

Putin merely accumulates huge revenues from hydrocarbons' export for much more than rainy day but for a catastrophe which "green" energy is already bringing to Europe and other places. You know, financing cutting edge weapons and R&D, and already immense programs of industrial construction--Russia just started to build a gigantic plant in Tula which will make Russia 100% independent in extracting Vanadium from byproducts of metallurgy. Currently Russia still sends some portion of byproducts to Austria and Czechia for processing because Ural plant for Vanadium doesn't cover all Russia's needs. And this is just one example. Not to mention the fact that Russia's infrastructure projects are financed already. As I said, you want to be a superpower--get your energy in order. You want to kill the economy of your country--go "green". But then again, it is impossible to explain to lawyers, MBAs and political activists with degrees in political science and gender studies who primarily drive "green" ideology and constitute West's political "elites" that physics is a complex science and that they better learn basic manufacturing processes of such things as wind generators and solar panels, not to speak of all those new types of batteries which, allegedly, will be able to resolve issues of accumulation. Good luck with that. You will have more luck explaining to 6-year old the meaning of life, than explaining some European social-democrat what Ohm's Law is. And since when what Russia does with her sovereign wealth fund is such a big deal in the West. Come on, we all know that Russia's economy is "smaller than that of Texas" and that Russia produces nothing. 

I've seen sheer idiocy in my life, especially on the eve of the Soviet collapse, but this West's "thing", holy shit--I never thought one could be that stupid. I was wrong.

Really Fast Glance.

It seems that the issue with understanding the economy persists. So, what I did, I fast compiled available data, with the exception of agriculture, on crucial sectors among countries which rank high in the world to give some impression on the actual sizes of economies. 

I will never stop reiterating--economy IS energy. No energy--bid your dreams of becoming a global power goodbye, unless you secure energy supply, such as China is doing this very moment. So, highlighted in red are countries with a severe deficit of energy as represented in MTOE (Million Tons Oil Equivalent). Then I give some (only some) data on industrial sectors which matter in CINC (Composite Index of National Capability) and Barnett's famous 14 points.  Obviously, today CINC absolutely doesn't do the trick but it could be grasped even by a child that production of metals matters strategically, because without steel, aluminum or pig iron the civilization will simply grind to a halt. 

I didn't put in commercial aviation because we all know main players and there is no necessity to go over it. But especially in terms of Airbus which is a multi-nation conglomerate and in this case one needs to credit several countries, including Germany, where, as an example the integration facilities are located. But that doesn't mean that Germany out of own resources can produce serious commercial aircraft. She can't in a foreseeable future. In terms of consumer goods--those numbers are estimates of countries covering their needs out of own resources. And that's the issue here--look at EU members? Taken separately they are dwarfed by such countries as the US, Russia, not to speak of China, who dwarfs everybody else. That is why when I hear or read all those IMF or World Bank GDP ratings I smile. E.g. in fundamentals of economy Russia dwarfs Germany, not to speak of France or UK.  Moreover, Russian economy is grossly (and not without intention) undervalued, while Western economies are inflated to a grotesque degree by means of assets' value inflation and counting FIRE as part of GDP. Even good ol' PPP--Purchasing Power Parity adjuster doesn't work. That is why Military-Industrial Complex is included and there are ONLY two countries in the world capable out of own resources to produce all nomenclature of the advanced military hardware: US and Russia, with China following. France still tries to maintain her position within this exclusive club and we are yet to see where will it get her. 

I mean it when I say that using Western "economic statistics", especially in monetary form is as useless as treating cancer with aspirin. Remarkably, even aging Patrick Buchanan notes two days ago:

The Eclipse of Europe. Not only is the center of political gravity shifting from Europe to Asia, European unity seems a thing of the past.

For anyone who didn't drink the Kool-Aid of Western economism and strategic (pseudo)thought it was clear for a long time that Europe was on her downward spiral and as latest events with energy deficit have shown one cannot live on shares, abstract economic indices and outright delusional statistics. To live--one must produce. To live well--one has to have a good grasp of what good life is, a problem Western political "scientists" wrestle with without any success for a long time. One can live without latest Mercedes model, one cannot live without heat in winter and air-conditioning in summer. In the end, less expensive and no less practical Skodas or Ladas are available. In the end, there is always Toyota, or Hyundai. We live inside the ongoing collapse of the old world and evaporation of the old myths and chimeras. That is why Erdogan goes to Sochi and calls Putin his "dear friend". That is why, looking at European economies anyone with IQ higher than the room temperature wonders how do they even survive. Well, I will continue to try to elaborate on these issues to the best of my mental and physical abilities, but just take a brief look at those numbers--they tell the story. 

UPDATE: forgot to mention. The US is making a killing in Asia selling American LNG. Naturally. Now is the question: what about Europe--you know Atlantic solidarity, NATO and all that. Well, nothing personal, just business. In related news, BASF closed 40% of its operation, while UK's fertilizers industry is completely paralyzed, like completely stopped. It is all down right surreal. France now wants to government-control consumer prices...but...but what about "free market" and invisible hand?  

The Technology Of Sacrifice.

On the altar of "democracy" and globalism--a euphemism for being eaten by the US. Here is the excerpt from my latest book:

In December of 2019 the cost of $0.38 per kWh (kiloWatthour) of electricity for an average German household was the second highest in the world, after Bermuda. For comparison, the same kWh in the United States cost $0.14, and in Russia—$0.06. For businesses, Germany’s price for kWh was $0.23—the highest among developed nations, with the United States at $0.11. Russia was at $0.08; China was at $0.10. The conclusion thus is inevitable. Given that Germany has the highest energy costs in the world for a developed industrial economy the prospects for Germany’s survival as a totally independent competitive advanced economy look increasingly slim, once one considers not only Germany’s energy policy but that of the EU as a whole, which among competent industrial and energy professionals creates a sense of bewilderment. 

It is 2021 now and Electric Rate website updated today (or yesterday) gives pretty much the same spread which looks like this: 

Well, pretty much all of the EU is in this table (see the rest of it on the website) and, inevitably, the greener they will become less competitive (not that EU can produce a bargain anymore) and, thus, survivable they will be. The US, in this particular case, is having a moment of schadenfreude, because it still hasn't been completely "democratized" by democrats, and at this stage GOP being utterly corrupt and in the pockets of a big oil is a...good thing.  For now. Not that the US is far behind, but at least it has more resources to avoid going full blown "back to caves" mode and it is still--you die today, I--tomorrow. Strategically, the United States will be happy to see Germany depart as an economic power because that opens opportunities for the United States in Europe. From resources to commodities. Even under the most favorable conditions Germany's energy costs were enormous (both for population and businesses). But if we begin to look at a broader picture, which is a production of some key materials which are crucial for advanced manufacturing, we may stumble on Germany's by far not impressive position. Here is steel production: 

Here is production of aluminum:

Once you begin to view things within the framework of physical economy, the trend of West's economic decline becomes visible. Here is another one:

And we can do this until hell freezes over while repeating meaningless mantras about Germany's "export-oriented economy", we have to understand that the times of the chimera of the Free Trade are over and appropriate adjustment of the economies is happening right now. For Western leaders brought up on the primarily Anglo-Saxon economic economic ideas--ideas generated by the sea-faring island nations insulated for the calamities of Continental politics, including catastrophic warfare--the awakening is going to be dramatic in terms of the levels of pain. And you should remember that for the last 7 years I am constantly on record--they are incompetent and cannot grasp the ideas behind main engines of a colossal geopolitical realignment and power re-balancing.  Sorry, they are just that ignorant.  Recall that:

Our Elites Couldn’t ‘Reset’ a Wall Outlet, Let Alone the Global Economy

I wrote on that issue not for once, including on reset. But I might as well say it straight why this is happening--office plankton cannot govern, period. It is especially incapable of governing in times of great change. The idea that some SOB Ph.D. in political science or law, who reads WSJ can have a grasp of a modern world is down right preposterous, as Western "academe" and political class prove it time after time, day after day. The West is run by a collective Fukuyama. And that is both the diagnosis and the indictment. EU is about to feel the heat, or, rather, lack of it and maybe reconcile itself to the idea that it is not what it thinks it is. As per US--there are certain benefits to the position of the superpower, but judging by the US political discourse those benefits will be squandered. No surprise here.

Now With Comments.

Tyler Durden of ZeroHedge posted today a piece by Bill Blain about the energy crisis. Blain opens with a broadside:

For many months myself and many of the investors I work with have become increasingly concerned at the growing instability and insecurity of energy markets. The 4 times spike in Gas prices this year has been a shocking wake-up call, highlighting energy insecurity in Europe and particularly the UK. Gas prices will remain elevated for months to come. The consequences are going to be brutal – and fatal for some. Energy – whether derived from fossil fuels, nuclear or renewables – is a commodity and the critical thing about commodities is: “You can’t print commodities like you can print money. The rules are not the same,” says my good friend and head of commodities at Shard, Ashley Boolell.

It is obvious--commodities ARE the foundation of physical economy which is THE economy, the rest, including finances, is merely a derivative, an avatar for exchange. But that is not main focus here. Blain writes about Russia, of course. 

The likely source of Gas will be Russia. And Vladimir Putin can’t wait.

The coming Energy Crisis will be his grand opportunity. Remember the famous photo of him with Angela Merkel and his dog prowling in front of her? Putin knew she has a terror of dogs so he deliberately intimidated her. He won’t deal with Europe. He will invite each European leader to plead their case individually, menacingly asking each leader why he should open the Gas Taps to their nation specifically. Covid 19 was the first big test for Europe. Its’ vaccine programme failures could have been disastrously fractious for the EU. When faced with a European Energy Crisis and Russia holding the cards, what’s to stop countries doing deals? Who will crack first? Poland? Germany? And what will Putin expect in return? Legitimacy?  A free-hand to deal with domestic dissent? Sanction ending? A free hand in Ukraine or even the Baltics? It rather depends on what price he thinks he can force Europe to pay. And what will Putin ask of Boris? That London reopens its door and markets to the kleptocracy he leads? Or something more…?  Make no mistake, this winter is going to be shocking. Be aware.

Blain, obviously, is fully ignorant on Russia because he doesn't understand the weight difference between UK and her rather dubiously qualified PM BoJo and Russia and Putin. The difference is not just in the weight category, and UK and any separate EU country is orders of magnitude less important geopolitically than Russia. The difference in is in power. Blain, being "investor" doesn't operate with such categories because they are beyond the grasp of the run-of-the-mill British "financial strategist"  and a product of Western "school of economics". That is why Western "strategists" cannot find their own ass with their own two hands in brightly lit room, since none of them understands real economy, real power, including military one and, being a product of Western non-STEM education, they do not have a grasp of physical economy in terms of advanced manufacturing. But that is not the main issue. The main issue is what highlighted in yellow. 

Talk about being ignorant and suffering from the acute case of folie de grandeur while being British. Putin is not going to "ask anything" from BoJo and UK. Least of all legitimacy? LOL. Blain should stick to what he knows best, which is a financial voodoo which turned UK into a pipsqueak of a country and continues to run the US into the ground with acceleration. Russia doesn't need any favors from UK nor any permissions on dealing with anything domestically, let alone about Ukraine and here is the point: what is the definition of "free hand" in Ukraine.  Can Blain give a definition of what this "free hand" in Ukraine means? He can't for a simple reason, as I already pointed out above--he will deflate within first minute when trying to talk about real geopolitics and real economy because he has zero background in those matters and does not operate with conceptual apparatus and epistemology of modern geopolitics because it is very difficult and requires serious STEM and natural science background. Should he have one, he would have known that the only concern for Russia in 404 is for it turning, an ongoing and accelerating process, into a complete shithole which in desperation may indeed commit suicide (including on the advice of Blain's homeland) and unleash the war against Russia which it will lose very fast and severely but will accomplish only one thing, which Russia was avoiding for the last 7 years--taking this freak of a nation with its third world problems and hostile population on Russia's balance. 

But Blain is not aware of this and his thinking that "London reopening  its door and market" for Russia is desirable is ludicrous. Same goes with lifting sanctions. Netherlands and Belarus are above the UK as Russia's trading partners and UK "market" is not that important for Russia as are Chinese or German markets, with the latter also declining in importnace. But the trend with EU (and UK as a former part of it) in general as I already stated not for once is on reorienting Russia toward East where her real economic and geostrategic interests are and in those plans both the US, and UK as the US chihuahua, are viewed as enemies with suicidal tendencies. So, for Blain it is time to wake up and smell the reality of UK being a secondary power at best (in reality--tertiary), and the fact that a lot of banking is done in London City doesn't make it a center of the world. The last remaining jewels of British engineering ingenuity and economic ability, such as Rolls-Royce, among very few others, should not give Blain a strange idea that he understands modern world, especially Russia, and how it operates. He doesn't, most "investors" and "strategists" don't, otherwise the collapsing Western World wouldn't have found itself in the place it is today. As they say in Anglo-world, the proof is in the pudding. I hope Blain at least heard this one. But generally, one has to ask why such illiterate trash as Blain wrote even has to be taken seriously. But I feel his pain. 

P.S. Has this "strategist" dabbled into the military analysis to compare armed forces of UK and Russia? Just wondering.

Almost Without Comments.

 None needed. 

The global energy crunch forced a German electricity producer to halt a power plant after it ran out of coal. Steag GmbH closed its Bergkamen-A plant in the western part of the country this week due to shortages of hard coal, it said by email. The closure is the first sign that Europe may need to count on mild and windy weather to keep the lights on as the continent faces shortages of natural gas and coal is unlikely to come to rescue.

Read again, attentively: The closure is the first sign that Europe may need to count on mild and windy weather to keep the lights on as the continent faces shortages of natural gas and coal is unlikely to come to rescue.

Western "elites" are morons with zero serious engineering and real science background.  So, let them continue to get greener. 

European utilities had already turned to coal due to shortages of natural gas, recently stepping in to the spot market to secure cargoes and even asking Russia for more supplies. China’s move to secure more supplies is likely to make matters worse, with Europe set to scramble to secure fuel this winter.

Don't tell me that I didn't warn you. Russia fulfills her contract obligations in full and if someone wants to commit suicide it is not Russia's responsibility to save them. They want more? Sure, pay the new price for additional volumes of whatever energy they want. If not--go fvck yourself and go full retard... I mean "green" which is pretty much the same in terms of delusion. They don't teach physics and electrical engineering in law and political "science" schools. Russia, meanwhile, has a much bigger fish to fry in the East and is in the process of reorienting her resources toward that market.  

Germany's Emercom already issued Public Video Announcement on how to not die from cold. 

Well, if Star Trek meme wasn't enough, this one covers pretty much everything, including indictment of EU political class who view their people as guinea pigs in a bizarre experiment of patients running the asylum.  

We are talking about criminal negligence due to utter incompetence and fanaticism of Western political class for which Europeans are paying the price already.