Side effects

and to help you contextualize it "zummo":

In the third quarter of 2001, which I highlighted in the graph, a very serious thing happened , as you will remember. The media managed the episode using two great classics: the "nothing will be the same" (and basically it's true: from then on getting into a plane has become a bit of a pain in the ass, from which we must take a lesson for the present), and the "has been x " (where x at that time was Islamic terrorism). In other words, I don't know if you remember it (but verifying it is not impossible), in the immediate aftermath of that dramatic event, and for the following six months, the unified network newscasts told us that the dramatic attack, with its repercussions, it had brought the world economy into recession: everything was going for the best, but unfortunately it was terrorism that disrupted the solid growth of the world towards a future of peace and prosperity. Ex multis , I recommend this , very indicative of the climate of the time:

Bad luck!

Everything was going well, but: "After the terror, the recession!"

Now, the truth is what the data paint (and which I remember immediately showed my students at the time): it wasn't all going well! The growth of the US economy was in free fall from the second quarter of 2000, that is, the US economy, while continuing to grow, was slowing down very markedly (from 5.2% in the second quarter of 2000 to 0.9% in the second quarter of 2001), which means that the recession was there before, not after the terror, and that in fact the terror (more exactly, "the war on terror" as it was called) was the end, not the beginning of the recession, because it had created that state of exception which legitimized governments to do the right thing (expansionary policies) without alarming too much those fearful children who go by the name of markets.

We have also seen this with the pandemic. The rhetoric of war (against the virus) has served to justify various things, some objectively unjustifiable, but others absolutely necessary, and which would have been such regardless of the virus, such as the suspension of "European rules", that is, of political canons absolutely irrational economic.

The important thing, in doing the right thing, is to be able to blame someone for it: to Saddam Hussein, to Sars-Cov-2, in short, to a Deus ex machina , or rather to a diabolus in musica , to a dissonance in the choir angelic of "all is well", which can explain why we proceed with measures that the circumstances would have required anyway, but which in a world totally perverted from the ground up appear justifiable only in exceptional circumstances.

Why am I telling you about it? Because exactly the very same thing is happening now. For example, look at the producer price index in Italy over the twenty-year period:

Here too, as you know, somewhere there was a very serious (and not very unexpected ) episode. I don't care because it coincides with the end of the historical series, but even here it is worth "zooming in" to understand how much they are making fun of you:

The doubling of the price of energy products is substantially consumed between September 2021 and January 2022. In February (the month of the outbreak of the conflict), the provisional data for now record even a slight decrease, as we can better see if we represent only the producer price index of the 'energy with its trend growth rate (right-hand scale):

Seen? In January 2022 (a month before the outbreak of the conflict) the growth rate of the price index of energy products grew by 118% compared to the same month of the previous year, i.e. the same prices had more than doubled (who reads this blog he knows that a 100% increase is a double, because he remembers the bad end made by a passing idiot …).

So what?

And therefore whoever tells you that "'a bbenza has increased because there has been' a guèra" is a misinformer scoundrel. Uninformed no, because, as our dictionary says, today it is easy to read up.

I do not give examples, you will find them ad abundantiam around.

Nobody wants to say that the doubling of prices precedes the outbreak of the war, because attributing it to the war hides the actual causes, those we had clarified for example here , having then the distinguished satisfaction of being followed by none other than Prodi . Yes, dear friends: not #hastatoPutin, or not only. We will see how much war has to do with the data for March, which will arrive in May. So far #hastatoLeuropa: the explosion in the prices of energy sources here is essentially due to two orders of factors, both of which are Euro-gen:

1) the "grin" delusion, which prompted everyone to reduce investments in the fossil fuel sector;

2) the "marketist" delusion, which led to manage supplies with "spot" rather than forward contracts , based on the assumption that it was appropriate to treat a strategic raw material such as gas relying on liquid markets rather than long-term contracts properly indexed term:

Notice the refined imbecility of assuming that "European sovereignty over gas price formation" by strengthening the role of the euro (?) Would reduce exposure to external shocks!

Apart from the fact so often mentioned here that since the changes in the prices of raw materials are often three-digit and those of the exchange rate in a Western economy are at most double-digits, it is a total idiot to think that we can compensate the former with the latter. , history tells us that two different and predictable things happened (so much so that both were prefigured on these pages):

1) when world production resumed, the pressure of demand increased the price of gas, fooling those like Europe who had thought of doing a smart thing by buying it day by day rather than with ten-year contracts anchored to the less volatile price of oil;

2) the outbreak of the war made it clear that the lord is who holds the resources: if you have gas, you decide in what currency to get paid for it! The fact of managing the euro is completely irrelevant if whoever supplies you with gas decides to be paid in rubles (and if you don't pay for it, they turn off the taps, which doesn't rhyme: it blackouts ).

That the problem is not war itself but Europe is demonstrated not only by the fact that the increase occurred before the war broke out, but also by the fact that to a similar extent it only occurred in Europe:

There are two groups of countries: the stupid ones, where prices aim to double (and in our case exceed it), and those outside the EU. I took two very different ones, Switzerland and South Korea, but the lesson is more or less the same. In Europe, whether it's France, Spain, Germany or Italy, the increase is staggering:

(although, of course, those who have coal or nuclear do better than those who don't).

Elsewhere there is the increase, but it is contained below 30%. The reasons can only be those I have told you, at least until you give me more convincing ones.

And here we come to one of the great side effects of wars, which is to hide responsibilities and therefore to guarantee a restart, a renewed momentum, but, inevitably … on the wrong path (the one that leads to the next war)!

The moral of the story is that it is not true that the euro protects us from the increase in the prices of raw materials (the logical impossibility of this assertion had been demonstrated here several times), while it is true that the EU enjoins us, besides to the absurd budget rules, even to the choices of industrial policy (in particular: energy) suicidal!

So what?

And therefore, of course, it takes more Europe! They told me I have to say it, and I say it, because I am disciplined. But you are free to think as you think …