Posted April 06, 2022
By Sean Ring
European Inflation is Insane
- Europes colossal energy price increase is unsustainable.
- Energy prices have nearly doubled in Italy.
- Political consequences are coming.
As Micah would say, Ouchy!Still, its our first vacation in years.So Im using that as my excuse for spending so much moolah in so little time.However, I just dont know how people do it here.Theres simply no way an ordinary family with ordinary incomes can survive this economic onslaught.This is why I think Europe is going the wrong way with Russia.It needs to cut a deal quickly, or the pain will be unbearable and there will be repercussions.In this edition of the Rude, well look at stories, numbers, and the political season that has Europe all up in arms.Dinner and Drinks with Neil
One of the great things about traveling is reuniting with long-lost friends.Pams friend from high school, Neil, has lived in Rome for 12 years.He came over to our Airbnb for dinner and drinks last night.Neils a lovely guy, and I felt comfortable asking him pointed questions about living in Italy in general and Rome in particular.He works as a physical therapist and has a wife and three sons.Neil said, Everything is great here, except the financial situation.Hes thinking of leaving Italy and heading to Florida.Frying pan to fire, methinks.But at least hes thinking about the best state to live in in America right now.No matter what sacrifices politicians call on one to make, families will flee if they can when the burden is too much.And when those sacrifices extend to young unemployed men, they lead to revolution.To demonstrate what I mean about rising costs, let me show you some stats.European Inflation
Eurostat is a handy website for all things economic in Europe.Have a look at this chart, which shows the Euro areas annual inflation. (By Euro area or the Eurozone, I mean the 19 countries that use the euro as their currency.)
Source: EurostatEuro area annual inflation is expected to be 7.5% in March 2022, up from 5.9% in February 2022.Thats the thick magenta line on the chart.The thin red line thats running away is the energy costs.And you need energy to do anything.Next, lets look at the sheer horror of European gas prices.My paisano Mark Rossano gave me this chart.All I can say is thank heavens people learned how to work from home.Theres no way to afford the commute anymore.
Source: Mark Rossano via BloombergPam, Micah, and I walked past a gas station in Rome.I can confirm the price was EUR 1.95 per liter.As a gallon is roughly 3.79 liters and the EURUSD is trading at approximately 1.09, it is equivalent to $8.06 per gallon.If you have a big car with a 16-gallon tank, thats $128.89 to fill it up.Its absolutely eyewatering.I remember filling up my gas tank in New Jersey for $20.Boy, dont you miss those days?Making matters worse, heres Italys National Institute of Statistics (bolds mine):According to preliminary estimates, in March 2022 the rate of change of the Italian consumer price index for the whole nation (NIC) was +1.2% on monthly basis and +6.7% on annual basis (from +5.7% in February).
The speed-up of the growth on an annual basis of the All-item index was mainly due to the prices of Energy (from +45.9% in February to +52.9%), especially of those of Non-regulated energy products (from +31.3% to +38.7%), whereas those of Regulated energy products confirmed their huge increase (+94.6%).
Theres no way politicians whove created this mess will escape unscathed.
We know the Democrats in the States are already trying to exit Biden.
But what about Europes political landscape?
Election Season
Serbia
Serbian President Aleksandar Vu?i? was elected for a second term in the past Sundays election, with a lopsided victory of 58%.His nearest challenger Zdravko Pono mustering only 18%.However, Vu?i?s Serbian Progressive Party (SNS) lost its majority in both the National Assembly of Serbia and the capital of Belgrade. It will be forced to enter into coalitions with smaller parties.The press describes Vu?i? as right-wing and populist.He doesnt want to rock the boat with Russia, and the two nations remain on good terms.Hungary
Viktor Orban cruised to yet another election victory this past Sunday.He also has been described as right-wing and populist.During his victory speech, Orban said, We won a victory so big that you can see it from the moon, and you can certainly see it from Brussels.Hes towed the European Unions line with Moscow because "unity is important" but said extending sanctions to include the oil and gas sectors is "a red line.France
And now, for the biggest prize of all, if she can get it.Marine Le Pen, daughter of Front National founder Jean-Marie Le Pen, is once again going toe-to-toe with Emmanuel Macron for Frances presidency.Le Pen has been described as far-right and populist.(Noticing a theme here?)Though she lost the last election to Macron, she has better than a sporting chance to win this time.In fact, shes peaking at the right time, while Macron is falling a bit:
Credit: PoliticoTo be sure, Macron still leads at 27%, while Le Pen is at 22%.I wouldnt be shocked if Macron won again, but a Le Pen victory would mean even Western Europe is tilting towards the right.That doesnt happen very often at all.Wrap Up
Whether its anecdotal, statistical, or political, the evidence continues to pile up against the status quo in Europe.While America will indeed have its reckoning in the November midterms, Europe has already started the trend toward pragmatic politics.If France elects a genuine right-wing leader for the first time in many moons, itll represent a seismic shift in Europes way of doing business.And Im sure the pinko Germans will be none-too-pleased about it.But this is the kind of thing that happens when people cant have their necessities cheaply.Disposable income is down across the board.The people look like theyve had enough.Will the politicians cave in to their demands - which probably means cutting a deal with Russia - or will they lose their seats instead?That is the question.Until tomorrow.All the best,Sean
The Ghost of Louis XVI Warns Trump
Posted September 16, 2025
By Sean Ring
“You can win the war and lose your dollar.”
Something like 1980 is about to happen…
Posted September 15, 2025
By Sean Ring
And Tall Paul Volker isn’t around to stop it.
The Curious Incident of the Dog in the Night-Time
Posted September 12, 2025
By Sean Ring
For all the media’s fearmongering, The Right didn’t even break a window.
America’s Rubicon: Two Murders That Changed Everything
Posted September 11, 2025
By Sean Ring
A DEI Death Sentence and a Political Hit Job
Just a Tad… The BLS’s 911k Emergency
Posted September 10, 2025
By Sean Ring
🪓The Donald Already Fired the BLS Chief. Now We Know Why.
Dollar Default in Digital Drag
Posted September 09, 2025
By Sean Ring
Did Russia Just Tell Us How the US Could Wipe Out $37 Trillion in Debt?