The collapse of Germany shocks many. But I have been discussing why this was inevitable for over a decade. 
Germany Is Unraveling Just When Europe Needs It Most
Bloomberg reports Germany Is Unraveling Just When Europe Needs It Most
Germany is reaching a point of no return. Business leaders know it, the people in the country feel it, but politicians haven’t come up with answers.
That has set Europe’s largest economy on a path of decline that threatens to become irreversible.
Following five years of stagnation, Germany’s economy is now 5% smaller than it would have been if the pre-pandemic growth trend had been maintained.
More worryingly, Bloomberg Economics estimates that the bulk of the shortfall will be tough to recover, due to structural blows such as the loss of cheap Russian energy and Volkswagen AG and Mercedes-Benz Group AG struggling to keep pace with China’s auto firms. The decline in national competitiveness means every household is worse off by about €2,500 ($2,600) a year.
To revive competitiveness, Germany ultimately needs to spend more. Just to catch up with other advanced economies, the country will have to increase annual investment on infrastructure and other public goods by about a third to €160 billion, according to Bloomberg Economics. That’s a rise equivalent to more than 1% of GDP.
The private sector has also held back. Expenditures on machinery are more than 9% below pre-pandemic levels. A recent survey among family-owned companies showed nearly half aren’t even planning to replace what breaks, blaming bureaucracy and unpredictable policies. That’s effectively a no-confidence vote in an economy fighting to retain its status as third-largest in the world.
Collapse of the German Government
Yesterday, I noted The German Government Collapses, Early Elections Are Coming up
Chancellor Olaf Scholz [SPD party] lost a confidence vote on Monday leaving a deeply fragmented Germany in his wake.
The only thing an election will do is shift the power from one very unstable coalition to another very unstable coalition.
I ran the coalition math. It’s pathetic.
The current Traffic Light coalition is SPD, FDP, and the Greens. FDP might not get 5 percent of the vote to stay in parliament.
All of the parties rule out an alliance with AfD (reportedly Far Right) and BSW (reportedly Far Left). Combined, that is 22-25 percent of the total.
AfD and BSW have three things in common. They are both anti-immigration, anti-NATO, and anti-Green.
A failure of the last “Grand Coalition” SPD + Union (CDU/CSU) led to the failed traffic light coalition.
Another Grand Coalition cannot possibly solve anything.
Conflicting Agendas
The Wall Street Journal has these humorous insights on the German Government Collapse.
Opinion polls show the center-right Christian Democratic Union, led by veteran conservative politician and businessman Friedrich Merz, as the likely winner of the ballot on Feb. 23. Yet the party is unlikely to command a big enough majority to govern alone or with the FDP, the other center-right party in Parliament, and will likely need to form an alliance with one or several center-left parties, forcing it to dilute its pro-business and law-and-order agenda.
“Mr. Chancellor…you had your chance. You didn’t use that chance,” Merz said in Monday’s parliamentary debate. “And it applies today, as it does on Feb. 23, 2025: You, Mr. Scholz, don’t deserve the trust!”
Merz and Scholz have different solutions in mind. The current chancellor has called for bailouts and subsidies to save jobs and prop up struggling carmakers, while Merz has floated a menu of supply-side measures such as lower taxes, less bureaucracy and steps that would make it cheaper for businesses to reach Berlin’s climate goals.
How is that Grand coalition supposed to make sense?
Without AfD there is no coalition math that makes any sense. But SPD and CDU/CSU have ruled out working with AfD.
The entire structure is nonsensical because neither Merz nor Scholz make much sense.
Merz is still wedded to nonsensical climate goals while Scholz wants to prop up struggling automakers. Sheeeh.
Shocked? I’m Not
This is all so predictable. The only thing debatably shocking is how it too so long.
Flashback April 11, 2013: Eurozone Math; One Size Fits Germany; Door Number Two
Eurozone Math
- Germany was the primary beneficiary of the ECB’s “one size fits Germany” interest rate policy.
- It is mathematically impossible for every country to be an exporter like Germany
- It is mathematically impossible for one interest rate to work when there is a multitude of fiscal policies
- It is mathematically impossible for the euro to survive without a transfer mechanism of some sort from Germany to peripheral Europe, and Germany will not allow any transfer mechanisms
- It is mathematically impossible within the realm of the euro for Spain to be more like Germany, unless Germany is less like Germany
- Germany has ruled out everything that could possibly make the eurozone work.
Euro Architects and Politicians to Blame
I do not blame Germany. I blame all the architects of the euro. I also blame all the politicians making matters worse by trying to force their will on the markets. In that sense, I do blame Merkel, but I also blame Hollande, Sarkozy, Trichet, Draghi, and everyone else involved in this mess, past or present.
One Size Fits Germany (Until it Doesn’t)
The math of the matter is Germany benefited from the Euro and from the ECB’s “one size fits Germany” interest rate policy more than any other country.
As a direct result of the unstable eurozone treaty, sovereign interest rate imbalances, Target II imbalance, and trade imbalances are out of control. Germany and the other European creditor countries are owed money that cannot be paid back.
More Like Germany
For years Germany insisted the rest of Europe should be more like Germany.
Germany skimped on infrastructure. It has pathetic internet compared to the rest of Europe.
Germany did protect old aging industries, especially diesel engines which I discussed many times.
It’s now payback time.
April 28, 2018: Bosch Announces Better Diesel Engine: Sorry Germany, Diesel is Dead
Eurointelligence: This story reminds us of the German company that developed the last generation of analogue telephone exchanges in the 1990s, hoping to fight off the relentless advance of the digital technology. It was mature and stable. And probably with some technical advantages over the then still-not-fully-developed digital technologies. But it came too late.
Eurointelligence: We find it hard to believe that this technology can be introduced early enough and in sufficient quantities to prevent diesel bans in German and other European cities. And the latter is the reason for the acute sales crisis of diesel cars, which has turned into a self-fulfilling prophecy. At a time when the US and China are developing electrical smart cars, the fate of the ultimate diesel engine looks to be the same as that of the world’s best analogue telephone exchange.
May 9, 2018: More Diesel Cheating: Germany Concocts New Ways, Audi Caught, Halts Production
Confirming a report in news weekly Der Spiegel, Germany’s transport ministry told AFP it was investigating the use of a new “illegal defeat device” in some 60,000 Audi cars, half of which are driving on German roads.
September 4, 2024: Volkswagen’s Choice: Fire Union Workers and Cut Costs, or Go Bankrupt
The unions and government leaders are howling but what must be done will be done.
Now chancellor Sholz has called for bailouts and subsidies to save jobs and prop up struggling carmakers. What a hoot.
But the German auto industry is dead. It lags the US and China on EVs, on batteries, on energy, and on basic infrastructure.
For decades Germany subsidized doomed technologies like diesel and analog phones.
The ECB’s interest rate policy “One Size Fits Germany” led to a housing bubble crisis in Spain and a near blowup of Greece.
Now Greek bonds trade at lower yields than French bonds.
Inevitable De-Industrialization of Europe
On October 12, 2018 I discussed the Inevitable De-Industrialization of Europe
Merkel has lost control. She is no longer able to protect German industry.
The European Parliament just voted to cut CO2 emissions by 40%. The European ministers voted for a 35% reduction. The latter is binding.
On June 25, 2019 I commented Rise of the Greens = Deindustrialization of Germany
Germany’s Green party killed nuclear power. German Chancellor Angela Merkel, once a strong supporter of nuclear energy, reversed course in a nod to the Greens. It did her party, nor Germany, any good.
Diesel is dead, and rightfully so, but Germany is not prepared for it. The Greens are also after coal, GMOs, and in general big business.
Deindustrialization of Germany
The Greens are going to force the deindustrialization of Germany.
- They do not want coal
- They do not want nuclear
- They do not want diesel
- The do not want Round-Up
- They do not want GMOs
- They do not want Google, Amazon, or any other large organizations
- They do want low-skill immigration
Merkel Bashes Trump
Here’s a pretty amusing flashback from May 28, 2017: Merkel Bashes Trump, Wants Europe to Control Its Own Destiny: EU Hypocrites
If the EU was really serious about “leading the way” I suggest the EU should not be big hypocrites.
I propose a good start would be to stop tariffs on solar panels, ban diesel autos, and reverse Merkel’s ban on nuclear power, and embrace rather than banning Uber.
If Europe wants to save the world, let them.
The EU Will Lag on AI for the Same Reason it Lost on Phones and EVs
Returning to more recent history, please consider my February 4, 2023 post The EU Will Lag on AI for the Same Reason it Lost on Phones and EVs
EU vs US Explained
Microsoft alone will spend over three times what Germany as a country will spend. Factor in Google, Amazon, and the US defense industry.
The EU likes to protect existing businesses. Germany cheated to protect legacy diesel engines for years.
On mundane matters like agriculture, France protects the small farm.
The EU now has lawsuits against Google, Amazon, and Microsoft. The US leads because the EU would bust up any company before it got big enough to lead on anything.
It’s the same story on artificial intelligence where Greens are hell bent on protecting rather than investing.
And heaven forbid any European company get big enough to achieve anything. The EU would bust them all up in the name of competition.
Four Fundamental Sets of Issues
- The Euro itself
- The EU
- German Fiscal Policies
- Governmental Structures
1: The Euro is fatally flawed. One interest rate for Greece, Germany, Spain, 20 nations in all, does not work. Productivity in Greece is not the same as Germany. Pensions and work rules are vastly different. There is no single eurobond like there are US Treasuries. Instead, Germany has bonds, Greece has bonds, France has bonds. The ECB rules out default. But if that was the case, there should be no differences in bond yields. Target2 Imbalances put a spotlight on the issue. That link is from 2012. I have been discussing these issue and how it relates to Germany for at least that long. To make any treaty changes all 20 nations have to agree.
2: The EU is structured such that it takes unanimous agreement to change anything not specifically allowed by treaty. A simple trade treaty with Canada took decades because one country held things up. France won’t budge on agricultural policy and a number of states including Germany won’t budge on eurobonds or fiscal debt brakes. The EU nannycrats do have energy policy authority and have made a total mess of things. The EU overregulates everything. And despite lagging the world on AI, it seems hell bent on regulating it to death. Google, Microsoft, Nvdia, Apple, and Tesla could not exist in the EU, because in the name of competition, the EU would have busted them apart before they amounted to anything.
3: Germany’s export model has crashed. It is no longer the leader in anything. German infrastructure is pathetic. Germany exported cars to China. Well guess what. China does not want those cars and the US doesn’t either. German leaders still want to protect its auto industry. Merkel destroyed Germany’s nuclear industry despite the fact that Germany is one of the safest places for nuclear plants based on fault data.
4: Review the German coalition math and conflicting goals I mentioned above. No math makes any sense. I have been writing about the failure of the Grand Coalition for a long time. That morphed into unsustainable Traffic Light Coalition that just collapsed. And now the only chance to get 50 percent is another Grand Coalition. And every country is saddled with Eurozone treaty rules as well as EU treaty rules.
5. The German constitution prohibits the types of changes needed to fix some of the problems. I discuss this in an addendum.
It’s Hopeless
The lead Bloomberg article in this post said “Europe’s largest economy on a path of decline that threatens to become irreversible.“
Threat? There is no threat. The entire Eurozone has been in an irreversible decline from the beginning because the structure of the Eurozone and EU are both fatally flawed.
Factor in country-specific issues and broken governments and it’s amazing that it took this long for as many issues to finally surface as they have in the past two years.
Even now, few have thought about the four fundamental issues that I just mentioned. And the treaties make things impossible to fix because every nation has to agree to rule changes.
The only unresolved issue is how much longer this foolish EU structure can last. I don’t know, and no one else does either, but perhaps Trump II brings it all to a head.
Addendum
I left off a 5th German issue, it’s constitutional court. The German constitution, in addition to the the Maastricht Treaty, mandates debt brakes, no debt comingling, etc.
There cannot be a eurobond until that is fixed (not that a eurobond makes any sense in the first place given the fragmented policies and work rules of various nations).
Instead, Germany is saddled with a broken target2 system in which all sovereign debt allegedly the same by treaty, but in practice isn’t, as noted by various sovereign bond yields. Implied odds of default are very different from what’s guaranteed by treaty.
Germany would like to fix EU agricultural issues but cannot because of a French veto. Every year for decades, world trade negotiations blow up because of France.
Germany (at least some political parties) would like to fix energy policy but cannot because of EU-wide rules set by the European Parliament and lack of internal agreement how.
Arguably energy is the most easiest problem to fix among those I discussed because it does not take 100 percent agreement to do so. However, addressing energy would take the European parliament and an internal German commitment to fix. Alternatively, Germany can tell the EP and European Commission President Ursula von Der Leyden (from Germany) to go to hell.
In the US, with its two-party political system, things can get only so crazy before someone comes along to fix at least some things. Trump will not be the savior his fans think, but he will fix some things.
Meanwhile, the US still has the largest, most free capital markets in the world. Europe has an unworkable, tangled mess of target2 and individual state bonds.
The center parties like SPD and CDU/CSU in Germany, and Macron’s party in France have imploded. Both governments are unworkable.
Euro apologists blame AfD, BSW, Le Pen in France, Vitor Orban in Hungary, and Geert Wilders in the Netherlands for being problems and causing unworkable governments.
In reality, all of these parties are a result, not a cause, of a fundamentally broken EU.
The only unresolved issue is how much longer this foolish EU structure can last before it implodes in a major treaty failure or currency crisis.
I don’t know, and no one else does either, but perhaps Trump II brings it all to a head.
Would voters REALLY punish the CDU/CSU at the ballot box for an alliance with the AfD? I get it: If allying with AfD will cost the Union seats in the next local or state elections, then there’s a strategic argument to be made against a coalition with AfD. Anybody living there in Germany know the answer to this?
Living on the Dutch side of the Dutch – German border I have witnessed this incremental German decline for some 40 years. It is like that Hemingway quote; ‘How did you go bankrupt? Two ways. Gradually, then suddenly.’
Every time I cross into Germany I feel like going back in time a decade or more. It bureaucracy is rigid, its infrastructure outdated and it social fabric has been fraying for decades.
To be fair, most of the smaller EU member states have responded and adapted to the changing world better. But they are not in the driver’s seat of the EU.
History will show that Brexit saved Britain from this, but Britain’s punishment by the leftist-globalist elite was the inflicting of illegal unwanted mass invasion and the further encroachment of the socialist police state into British lives, and the debt crisis.
“to revive competitiveness, Germany needs to spend more..”
No! The leaders of Bloomberg are clearly part of the money printing debt monger cabal that has caused this mess all over the world due to overspending. It’s the debt from spending too much that is the problem. I don’t know what these people’s plan is after they pillage every country and every thing they can. They think they won’t be affected by the damage they did or what?
I would expect to see a wave of European immigration into the US. Europe is going to take some time to sort itself out but until then opportunities for young ambitious people are going to be slim. The The US can easily absorb several million or more Europeans who have basically the same culture and outlook. There is already a steady brain drain and I think it will turn into a stampede soon.
Just wait when DOGE is exported to Europe. That will be start of MEGA as low skilled public service workers will be looking for jobs.
I am waiting and waiting and waiting……….
jobs are drying up everywhere, as the recession-stagcession-depression flywheel continues to accelerate. No sign of good news until the late 2030s.
Agree. But don’t you know, our powers that be here in America don’t want white immigrants now do they?????
And on top of “what he said” they have to absorb islamic nut jobs that dont want to work!!!!!!!!!
Seriously, that is brilliant analysis from our leader.
The EU is over, just not legally or in currency
That’s just to terrorise the public – keeping the costs of the police state down by unofficially engaging illegal alien thugs who are happy to commit crime, expand the black market, and terrorise the natives with their foreign mediaeval ideologies.
EVs & AI are not profit centers and may never be.
EV sales are decreasing, and there are problems with the grid and charging them, let alone battery resources.
AI requires tons of energy which is already not there, you need an ROI which pays back investment in 18 months (to keep up with the tech cycle), and I do not see anything out there that is not a cash furnace.
My first suggestion would be to break with NATO/America.
I agree with you, more so on point 1………your last point i’llgo further. I think NATO should be disbanned…..Why Europe or the EU listens to America about Russia is beyond me
…because America is the biggest consumer, and in case you hadn’t noticed, the EU is failing to sell enough stuff abroad to keep their socialist pan-european panoptican fantasy alive.
I think of several things, but have trouble organizing them to make much sense. Germany now reminds me of the Morgenthau plan proposed at the end of WWII to deindustrialize Germany and break it into four agricultural nations forbidden to unite. Is becoming a lower-income, subsistence, little trade nation a la what we remember of the Great Depression in Germany’s future?
The EU’s unanimity requirement reminds me of the end of the USSR. Moscow didn’t seek it. Instead, several of the other ‘Soviet Socialist Republics’ met, presumed that the USSR was done, and proposed a Commonwealth of Independent States (CIS) to replace it.
I wonder if any German author has attempted to write something like ‘Atlas Shrugged’ for Germany. They look like they have gone further in that direction than we USA had in 1957 when Ayn Rand wrote her novel. So far the nearest novel I can think of is ‘Head Births’ by Gunter Grass, about Germany’s population birth rate and impending population decline.
It is interesting that once #2 economy Japan is now smaller than current #3 Germany.
East Germany still kind of exists, culturally, politically, and economically, and the real test is whether it will tolerate the idiocy of West Germany. The wildcard is the industrial state of Bavaria, which is taking the brunt of deindustrialisation. Whither they?
Germany was killed by indiscriminate immigration policies, along with the rest of the EU. I hope Trump keeps his word about correcting the indiscriminate immigration policies of the USA over the last four years, before it’s too late. And that includes aggressive selective deportation.
Remember that these people invaded Russia in 1941 with summer clothes.
Summer Cloze – proper spelling, invaded Switzerland, and fell into a tiger pit, dug by Teddy Rosevelt some years before, Ms Cloze received a sprained ankle and a marriage proposal from Herr Growling of the AlpenHaus Growlings. She never set foot in Deutschland again, and became an interior decorator. I’m not certain what point you were trying to make, but all these facts are easily checked with AI or Wikipedia the 2 central sources of all modern truth.
Fun facts.
In 2022, Germany extended her carbon credit system globally: a German company could buy their mandated carbon credit from any project in the world that was started past the introduction of the law.
They set up a government office to monitor it, but left the auditing to private companies (who were not audited, and so could make a bundle).
Gee whiz, the Chinese obliged. They set up shell companies claiming dozen of false projects with perfect documentation.
After the scheme broke, a committee is investigating, however only the failures. The idea that the scheme was stupid from the start is unquestioned – except maybe by some far-right extremist party.
Germans are natural born nationals socialists. Socialism failed with every attempt. Germany is following in the footsteps of Cuba, Venezuela, and Russia.
The bills have indeed come due.
Got Gold/Bitcoin?
No way out.
Let’s hope cooler heads prevail.
On the day of reckoning, all the gold in the world will not avail any soul if it has earned punishment, which it will receive without the least injustice.
Very insightful Mish. I never really thought about how the euro is a one-size-fits-all currency for governments with very different fiscal policies until you said it. While I support a return to the gold standard, the euro is not gold. The economic problems in Europe will probably continue to mount until interest rates spike in a debt crisis or the currency blows up. Maybe that’s overly dramatic, but it seems to be the trajectory.
Europe is fractured culturally as well as economically, and holding it all together is a lost cause. This is pretty evident now in the largest EU member states seeing open revolt against the EU: Germany; France; Italy; plus smaller but still economically significant ones like Netherlands; Austria; Denmark; Sweden; Finland; Poland; Hungary; Spain; and smaller economies like Greece; Portugal; Slovenia; Estonia etc.. the revolt against the EU is not everywhere, but it is extensive, persistent, and pervasive.
On top of everything else, ZH notes “NATO Head Says “Wartime Mindset” Needed; Redirect “Pensions, Health, Social Security” To Military Spending.” I wonder how that program will viewed by the public.
https://www.zerohedge.com/geopolitical/nato-head-says-wartime-mindset-needed-redirect-pensions-health-social-security
The military builds solid citizens.
Social programs encourage citizens to become parasites.
The West would be far better off to spend more on their militaries & less on social programs.
While it’s not a state, I would definitely put Kalifornia on the short list.
I know you hate the Fed with a passion, but others have proposed that the destruction of German, French and the UK economies has been deliberately helped along by Powell in order to stop the Davos crowd initiatives……
Would it be bad to say this is same policy that is guiding California.
Both true & bad.
Easy. End EU, end Euro, end Energiewende, end fracking prohibition, end useless immigration, end Nato, end Russia prohibition. Or, put AfD in charge.
Dreadful Industrial Production numbers this morning
Mish….you are an ever ready battery. Do you ever rest?
My wife would tell you no. She calculated I make about $3 an hour from ad revenue on these posts.
Mish might consider moving to Germany? There the Government will supposedly Legislate away– everyone’s problems.
Lucky you make it up in volume!
its not what you make, but what you keep – every financial planner ever….
Germany and the whole EUSSR communist project ended with Nordstreme
and why it was done by OSS/CIA/MI5
Germanys ONLY change is to leave the EUSSR and do a deal with Putin
on cheap energy
and deport the 5 million immigrants home
Addding GMO and Roundup to the discussion is disengenuous. We need those like Pfizer covid shots.
Otherwise OK article. Although nuclear ppwer is a part of tgebUkraine disaster.
yeah I need a menu, I like coal and nuclear, hate GMO and Roundup. Bayer Aspirin is very good indeed. Worth a world war apparently.
Germany one must understand is a U.S. colony, like Japan and Italy. That was the purpose of ww2, or at least the outcome. We weaken the colonies to strengthen the home land.
The Greens are through some channel or means paid by the State Department or its offices in the CIA. We sow chaos for large scale profit throughout the globe, read history next to the annual shareholders reports.
Anyone who sows chaos for profit has wandered far astray. All their deeds are recorded in a profound record. They will be summoned on the day of reckoning.
Agreed. I’m not sure what the point was to add those to the list. If anything we should be strict about the quality of what we feed ourselves and our children.
Don’t forget that Shedlock was berating people for not getting the covid vaccine.
Anti OTAN, anti immigration and anti Green. Sounds perfect. Unfortunately German voters are mostly women and eunuchs who have had the common sense conditioned out of them.
When Greece sink Eurozone can be saved.
Now Germany and France sink at the same time – this is the end of story.
Bye – Bye EuroTitanic.
See you in next life.
OFFICIALLY, no one doubts the Union’s ability to do what needs to be done, and no one questions the euro’s survival. Just look at european bond behavior and the euro-dollar exchange rate.
According to who
whom…
Indeed
“officially”
Ironically Germany was one of the few countries who benefited from the Euro and they still stink as an economy. End the Euro too
New Zealand is a Total Shit ShowCalls for taxpayers to fund oil and gas exploration!
Oil and gas lobby asks government to underwrite fossil fuel exploration, minister ‘considering options’
The oil and gas lobby has asked the government to underwrite the risk of fossil fuel exploration, with the taxpayer potentially taking “some or all” of the risk if new gas supplies fail to eventuate.
What has changed is that all the extra drilling hasn’t turned up much extra gas in the past few years. This is despite record amounts spent on new wells – nearly $1.3 billion between 2020 and 2024. Energy companies now think there’s less gas than previously thought. Source
NZ is DOOMED.
Power crisis cost the economy $300 million this year, expert says
A leading energy analyst estimates this year’s power crisis cost the economy $300 million in lost exports.
The actual cost will be revealed next week when quarterly GDP figures come out.
Enerlytica head of research John Kidd crunched numbers, including Ministry of Business, Innovation and Employment (MBIE) data, to reach his estimate.
Figures showed a 10 percent drop in industrial electricity use for the June to September quarter compared to the same time last year. Following the spot price soaring in that quarter, three North Island mills closed, resulting in the loss of hundreds of jobs.
Kidd said the industrial sector contracted production in response to what was happening.
https://fasteddynz.substack.com/p/new-zealand-is-a-total-shit-show
Like I said – DOOMED.
I exited 9 months ago selling all assets… anyone with a NZ passport can jump on a plane and take a 2 hour flight to Australia and escape the bottom deck of the Global Titanic.
Of course Australia is not a long term solution given every country is coming apart at the seams… but it is a temporary lifeboats for NZers…
I wonder how Australia is not also imploding given it is totally reliant on mining and selling metals etc to China… and the Chinese property market – a major consumer of these metals… is essentially dead.
But New Zealand has the best woke Navy in the world..isn’t their favorite cocktail, a ScienceShip on the rocks?
I’m in Sydney and the typical person here is a sheep. Most don’t realise that without China continuing to buy iron ore, and the metallurgical coal to smelt it, then this cuntry is screwed. No car industry, not much oil, not much heavy industry and lots of imports that currently rely on the money made exporting raw materials to China.
Seems like most advanced countries are either in debt, running trade deficits or suffering from a low birth rate and relying on importing dubious persons from the turd world. And many suffer from all 3 problems.
I am in WA… how is the mining sector holding up now that China is not building ghost cities and other white elephant infrastructure?
As I understand it, Oz is just a mine now… people choose mining over working offshore because the pay and conditions are better, so Oz can’t get enough offshore workers to get at all it’s potential energy, whither NZ?!
NZ and Australia don’t need industry. They can sell each other overprices houses, and everything will be fine. /s
and take in CCP fake refugees to colonise it and turn it into another belt-and-road colony like Canada.
Just from geology I wouldn’t expect oil and gas on a volcanic island arc. Geothermal yes. Maybe wind on the South Island.
Indonesia, Colombia and Venezuela are examples of nations on tectonic boundaries that have oil deposits close enough to be in their national boundaries. Also true of the states of California and Washington (coal).
Yet they lack the skills base and infrastructure and competent leadership to get at any of it, hence all three are basket case economies for the forseeable future.
NZ does have oil and gas… the problem is that both are in deep depletion and there is no more to be found.
NZ is where we are all headed:
Shale binge has spoiled US reserves, top investor warns
What’s saved the world from oil decline was unconventional tight “fracked” oil, which accounted for 63% of total U.S. crude oil production in 2019 and 83% of global oil growth from 2009 to 2019. So it’s a big deal if we’ve reached the peak of fracked oil, because that is also the peak of both conventional and unconventional oil and the decline of all oil in the future.
Some key points from this Financial Times article: https://archive.md/vU2zH
The niggard in the woodpile is that birthrates are collapsing in those overprices economies as young people can’t form families and households, and immigrants won’t find much work in such remote places. Ironically, a falling global population might make the fossil fuels last longer, but the economic devastation from the deflation that is already here (not inflation as Mish claims) is going to be chronic price to pay for it.
dinosaurs die everywhere, also tremendous forests get buried periodically when the sun flares, no tree on earth is older than the last ice age. All that biomass makes a mess of coal and oil and gas, pretty much everywhere, except deserts, oh wait the Levant. Saudi’s swimming in petroleum.
I had an uncle who was living in West Virginia, he was shooting at some food, when up from the ground come a bubblin crude, oil that is, black gold, texas tea….
The whole Persian gulf, and Caspian, a lot of which is under Iran… the Venezuela of Asia.
Holy smoke, a chain of islands created by a fault line at the edge of the pacific plate exploring for gas?
Is this a joke, or has NZ been conquered by DEI?
https://en.wikipedia.org/wiki/Oil_and_gas_industry_in_New_Zealand
The oil and gas industry in New Zealand explores and develops oil and gas fields, and produces and distributes petroleum products and natural gas.
In 2022, New Zealand’s net self-sufficiency in oil (mmbls production divided by consumption) was 12%, i.e. the country imported much more crude and refined oil than it exported.[1] All crude oil extracted in New Zealand was (and is) exported as the Marsden Point refinery was not suited to processing it.[2] In 2018, 60 petajoules of crude were produced in New Zealand, 380 PJ of petroleum products imported (most of it crude), and 283 PJ consumed. The difference is exported or used for international travel (aviation fuel and similar).[3]
Oil and gas are produced from 21 petroleum licenses / permits, all in the Taranaki basin.[4] The most important fields are Kapuni, Maui, Pohokura and Kupe. Exploration for oil and gas reserves includes the Great South Basin and offshore areas near Canterbury and Gisborne.
Let’s add some other variables… the maritime and offshore industries in Australia are heavily protected by unionisation to the point where it’s very difficult for companies engaged in offshore energy work to hire staff (because they have to do longer-term visas and can only do them a couple of times, they can’t hire in short-term contractors like many parts of the world).
Offshore pay in Australia is on the higher side, but that’s mainly due to the constraints on getting people in. Imagine NZ, where most of the workers leave to go and earn double in Australia, where they have nice visa arrangements; implicit in that is that NZ offshore wages are so low, that nobody from outside there with the right skills and paperwork wants to work there.
NZ is looking increasingly like remote areas of Scotland or Canada or something, where the young people are keen to leave to see the world, make more money, and have a better life. It might be alright for the superrich to hide from the apocalypse, but if you are young and from NZ or any developed country, where do you go to make enough of a living to have a start in life? They can’t all become “bitcoin bros” or “OF hookers”.
It’s actually the worst place to establish a bolt hole… it will be the first whitey nation to collapse
And yes there is a huge outflow escaping the disaster… including donkey face Ardern
You don’t find oil in island chains raised by volcanism. Japan and New Zealand are the best examples.
Japan is full of oil, the americans and the russians keep selling it to them. New Zealand runs on electricity and Unicorn Farts.
I thought Australia was toast too… it looks like NZ, Canada, and the Anglosphere is stuffed for Christmas. Trump offering statehood to Canada, how about Australia reunifying with NZ? Kiwiland seems non-viable on it’s own.
Wait till the dairy farming energy hedges need to be renewed… then you’ll see some serious pain