Doomberg: Pipeline Explosions and the Drumbeats of War

Tom welcomes back our little green chicken friend otherwise known as Doomberg. Many things have happened since he last dropped by, and now the sky does indeed seem to be falling. Doomberg discusses how newsworthy events keep accelerating. News broke yesterday that a pressure drop occurred in the Nord Stream 2 pipeline, which connects Russia to Germany. It has never been used, even after many billions spent on its construction. It runs parallel with the Nord Stream 1 which used to provide much of Europe's natural gas. Furthermore, it now appears that both pipelines have been sabotaged. The consequences will be vast for Europe, and we could see serious geopolitical escalation. Much will depend on the degree of damage to the pipeline. In a perfect world, the damage might be limited, but repairs would probably take twenty plus weeks. Who will pay to have the pipelines repaired? This event could condemn Europe to multiple disastrous winters. Various E.U. countries can only store a small percent of their winter needs. Austria has a large storage capacity, while in other countries like the U.K. storage is basically non-existent. Europe is entering the winter with insufficient stores. How will the gas reserves be efficiently distributed. Natural gas supplies to Japan are also becoming problematic due to the demand from Europe. The Yen is under pressure because of the dollar's rise and the lack of availability of gas. The strong 'milkshake' dollar is becoming a real problem for nations. Luke Gromen believes the Fed will be forced to pivot at some point. Doomberg says, "What can't go on forever usually doesn't." The west shouldn't be trying to limit energy supplies like those from Russia. Supply and demand economics makes it clear that shortages cause high prices. The sanctions have only created more profits for Russia. We should instead try to swamp the markets with cheap supply. Doomberg notes, "It seems like there is a lack of second and third order thinking." Doomberg asks, "How much pain does a developed, civilized society like Germany need to experience before they consider opening a physics textbook?" History will use them as a case study. Less efficient forms of energy and scarcity have historically resulted in more dead people. Talking Points From This Episode * Pipeline explosions and massive problems in Europe.* Currency problems as the dollar powers higher.* Gas storage in Europe and problems looming in agriculture.* The need for nuclear energy in the green utopia. Time Stamp References:0:00 - Introduction1:55 - Downstream Effects4:20 - Ramifications9:32 - E.U. Gas Levels11:57 - Japan & the Yen15:05 - Currencies & Mindsets17:20 - U.S. Treasuries21:13 - Russian Energy25:44 - Dedollarization27:12 - A Perfect Storm32:30 - The Green Hypocrisy36:50 - Facing Reality38:23 - Tradeoffs & Nuclear46:50 - Wrap Up Guest Links:Twitter: https://twitter.com/DoombergTWebsite: https://doomberg.substack.com Doomberg is the anonymous publishing arm of a bespoke consulting firm providing advisory services to family offices and c-suite executives. Its principals apply their decades of experience across heavy industry, private equity, and finance to deliver innovative thinking and clarity to complex problems.