Q&A on Putin and Energy Price Caps, Does Anyone Have a Better Idea?

In Search of Better Ideas 

The situation
1. Is it possible to get rid of Putin w/o recession? No
2. Can Ukraine fight Russia in a longer-term war? No
3. Is the status quo sustainable for the West? No
4. Is the G7 oil price cap a perfect proposal? No
5. Does anyone have a better idea? No
6. Where it’s at… pic.twitter.com/CDDeeIDuPJ

— Robin Brooks (@robin_j_brooks) September 7, 2022

The Situation

1. Putin did not cause this recession but he aggravated it. In order, central bank policies, government policies, and responses to Putin caused or aggravated the recession.

2. Agreed

3. Agreed

4. No, It’s a terrible idea.

5. Hell yes. Stop the stupid sanctions, everyone of which has backfired, as predicted in advance. Start negotiations with Russia.

6. We are here because the political desire to do something, anything, even the wrong thing is overpowering. 

To add one more important idea, the US will not avoid a recession. However, the EU will have a much worse one, especially for following the US lead on backfiring sanctions.

Italy’s Salvini Says West Should Rethink Sanctions for Russia

Like him or not, good ideas are good ideas. 

Here’s a good one: Italy’s Salvini Says West Should Rethink Sanctions for Russia

Speaking at a conference of political leaders Sunday on Lake Como, Salvini claimed the sanctions meant to punish Moscow over its invasion of Ukraine had in fact helped Russia, resulting in an export surplus of $140 billion, during the year ending July 2022.

“Do we have to defend Ukraine? Yes,” Salvini said. “But I would not want the sanctions to harm those who impose them more than those who are hit by them.” 

Macron Defends Russia Dialogue to Prepare ‘Negotiated Peace’

After calling for more sanctions and watching them backfire, French president Emanuel Macron switched positions.

Please note, Macron Defends Russia Dialogue to Prepare ‘Negotiated Peace’

French President Emmanuel Macron on Thursday defended his policy of keeping up a dialogue with Russia after its invasion of Ukraine, saying that Turkey should not be the only power talking to Moscow and preparations should already be made for a negotiated peace.

“Who wants Turkey to be the only world power which continues to talk to Russia?” the president told a meeting of French ambassadors at the Elysee Palace.

Macron argued that world powers should already be preparing for a “negotiated peace” to end the conflict that has already lasted over half a year, while emphasising it was up to Kyiv to decide on the timing and the terms.

“We must prepare for a long war. We must avoid escalation and prepare the peace,” he said.

Two Good Ideas

• End the sanctions. 
• Prepare for a negotiated settlement whether Ukraine likes it or not.

Instead, we are doing the opposite, compete with people suggesting there are no batter things to do than something that is downright asinine.

Putin Retaliates With Natural Gas Shutdown After G7 Announces Oil Price Caps

On September 4, I noted Putin Retaliates With Natural Gas Shutdown After G7 Announces Oil Price Caps

Within hours of the G7 approving Biden’s buyer’s cartel plan on oil, Putin retaliated by shutting off all natural gas to Europe. Good luck with that.

Hooray! The nannycrats got their wish. They will pay Putin zero for natural gas. They just don’t get any.

There are no better ideas. Really?!

A price cap on oil is equally ludicrous. Russia has willing buyers in India and China. 

Doing nothing at all is better than doing something counterproductive. So add doing nothing to the list of better idea. 

Meanwhile, instead of taking actions that make sense, the US is funneling hundreds of billions of dollars in money and equipment to Ukraine while the EU does nothing but go along with counterproductive US sanctions. 

US weapons to Ukraine support a prolonged war.

Who Started the Economic War?

Bloomberg reports Putin’s ‘Economic War’ Has UK ‘Panicking,’ Ex- Energy Boss Says

Putin started a war with Ukraine. US meddling led to that result. Nonetheless, place the blame 100% on Putin for the invasion if you like.

In response to the invasion, the US and EU started the economic war with a series of escalating sanctions on Russia, the latest of which is a nonsensical buyer’s cartel.

If you put yourself in Putin’s shoes, his reaction was the logical one.

This will lead to nonsensical charges that I support Putin. I don’t. I never support starting wars nor trade wars that are not winnable.

The asininity of all these sanctions and coordinated actions is that they have driven up the price of oil and natural gas to the point Russia is making more money than ever before while selling less oil and gas to the EU.

How stupid is that?

And is there any reason to believe Putin would not shut off all oil exports if the buyer’s cartel price cap actually held firm?

Expect a Long Period of Weak Growth, Whether or Not It’s Labeled Recession

On August 19, I commented Expect a Long Period of Weak Growth, Whether or Not It’s Labeled Recession

On August 26, at Jackson Hole, Fed Chair Jerome Powell Pledges to “Act With Resolve” to Beat Inflation

Key comments: “Reducing inflation is likely to require a sustained period of below-trend growth.”

We have already had a full year of very weak Real Final Sales growth (assuming there was any growth at all). Expect more weakness.

Please note The Fed is Openly Cheering the Stock Market Plunge Following Jackson Hole.

Good luck with that. 

Meanwhile, I can guarantee right now the war will end in a negotiated settlement, I just cannot predict when. Asinine interim responses will prolong the wait.  

This post originated at MishTalk.Com.

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