It's better not to be fooled and have an open eye and open insight on the crude and capitalist minds gameplay. The biggest mistake while going ahead with traditional economic theory is that Fed will be going ahead with an interest rate hike which will be going to extreme pressure on the struggling society. Europe has already a done blunder and it seems that they have got into the sudden interest rate hike. The Eurozone wages and salaries index rose by 2.3% YoY in 3Q21, compared with a pre-pandemic high of 2.9% YoY reached in 2Q19.
Now the pressure of the interest rate hikes will be felt across the society and particularly for those who are just above the poverty line. As for Germany, the index of agreed hourly earnings rose by only 1.1% YoY in January, the lowest growth rate since March 2011.
For example, in Europe, the energy cost has gone up where it is being found that Benchmark European gas prices at the Dutch TTF hub rose by 330% last year, while benchmark German and French power contracts have more than doubled. This energy crisis should also be taken in another way round where the Paris climate proposal is being humiliated creating pressure on the citizens. Yes, it is an indirect way of squeezing the intellectuals and those who think about climate to place pressure through exorbitant fuel costs which creates massive problems for society.
Hence one can get clarity about the other way round of making money for the capitalist mind. The policy related to transmission to zero is not only inflationary but also going to be a painful act. In short, it’s the cost of an attack on the political favors of fossil fuel.
Europe and the U.S and many other countries across the globe, it is being found that energy suppliers pass on higher wholesale costs to consumers through their retail tariffs. In Britain, for example, on a dual fuel bill (electricity and gas), the wholesale cost can account for 40% of the total.
Taxes might come down like VAT so that goods become cheaper and people could buy. Yes, that is another aspect that will happen when aggressive interest rate hike along with exorbitant fuel prices pulls down the household and corporate consumption. This will further bring down the earning projections of the macro numbers across those countries where the balance of activities will come into play.
As it has been projected by the Bank of England that Britain's inflation will soar to 7.5% in the next 6 months makes only one thing scary about cutting down on consumption and its ripple effect on the economy and society. Well very well planned punishment for the Paris climate supporters. By 2050, the world population will expand by 40%, and the energy demand will at least double.
But there is a boon among all these fiascos. The pace of investments in alternative energy will now be the top priority for many economies and they will now deploy trillions faster energy independence from fossil fuels. It’s now a game of speed between old capitalist and the new capitalist minds.
Hydro and Nuclear energy will come into play and these segments need significant capital and also they have economic growth factors and demands creators. For example, China is driving growth in the global nuclear sector. It plans to build 150 new reactors by 2050 — an effort that will cost $440 billion. More than 40 nuclear plants are now under construction there.
Asian countries are the ones who will find more poverty numbers increasing and more re-adjustment in household expenses due to rising crude prices. This will get captured in the coming quarters of FMCG and other segments of the industry. The more crude prices increase the more stock market will feel the pinch. Ignorance has also limited days.
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