The Kraken Is Yet To Be Released -- The EU Is In Deep Trouble -- April 5, 2022

Updates

10:27 a.m. CT: yup, it's true. We don't know when and how, but the EU says it will ban coal imports from Russia. Link here.  

Original Post 

A reader sent this CNBC article: EU to propose ban on Russian coal imports. 

My thoughts:

The EU is in deep trouble, but it's starting to make sense why the EU waited so long to announce sanctions on Russian energy.

1. First of all, obviously, the EU cannog survive without Russian energy if they don't alternative energy supplies.

2. Plan A: the EU was hoping for a short war so they could avoid sanctions altogether.

3. Plan B: even while hoping Plan A would work, the EU was working on Plan B -- lining up LNG imports from the US and lining up dry cargo tankers to ship coal from Australia.

4. They can now start to talk about sanctions on Russian energy now that they've lined up alternative energy sources.

5. They would have liked to have had more time but the photos and videos coming out of Bucha and other cities in Ukraine made it politically and morally impossible not to announce sanctions.

6. Expect to see articles next week on armadas of coal moving to Europe. Biden will do everything he can to keep the US from participating in coal exports to Europe. We will see yet more Greta memes.

By the way, this leads credence to the possibility that automobile manufacturing in Germany is due to parts shortages as well as prohibitively high electricity costs. 

All of this put together pretty much points to a(n) European recession earlier than later, and that will quickly spread to the US. Generally defined as two consecutive quarters of negative growth in the GDP, a recession won't be official until well after the fact, though we will feel the effects much sooner. Monthly economic reports will allow analysts to "predict" GDP before official numbers come in.

Look for a recession, high energy costs, very expensive gasoline, hurricanes, a BA.4 Covid variant, and a southern surge at the border all hitting about mid-October, 2022, if not sooner. 

By the way, isn't October, like, the worse month for stocks in the entire year? That's a rhetorical question.

The kraken is yet to be released. 

One may want to start stockpiling non-perishable foods and paper products if one has not already started.