The European energy crisis has begun.
As Europe gets closer to the cold winter months, its energy prices remain sky-high.
In this video we will focus on a few countries that are affected by this energy crisis, and how it got to this point.
Natural gas supply from Russia to Germany has been slashed by 80% for 4 weeks, with prices increasing by over 10x in 1 year!
The war going on in Ukraine exacerbated this problem, but this has been an ongoing issue even before the war started, going back to 2021.
46% of Germany’s energy mix is comprised of renewable resources, however, they are still heavily dependent on Russian gas.
Unfriendly regulations towards fossil fuels, despite having a heavy reliance upon them, have caused Germany and other countries within the EU energy dependent on foreign imports.
Watch until the end of the video for my thoughts!
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⏰ Timestamps ⏰:
0:00 – Intro
0:33 – Germany Energy Prices Increasing
2:51 – Germany’s Anti-Nuclear Campaign
4:25 – The European Energy Crisis
6:48 – How to Position Yourself
8:23 – My Thoughts
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Hey everybody welcome back to whiteboard Finance my name is marco and i’m here to Help you master your money and build Your wealth in today’s video we’re going To be talking about the european energy Crisis winter is literally coming so if You’ve been following this at all this Is going to be a presentation that just Highlights some of the things that are Going on specifically In germany and throughout europe The reason for this is if you’ve been Following geopolitics or any of this Stuff going on for a number of years now This was almost able to be seen but We’ll jump in and show you all the Actual numbers and facts here so this is Talking about german energy prices Skyrocketing why is this happening so This is the german one-year forward base Load energy price this is basically an Instrument used by suppliers and buyers To hedge for german base load energy It’s denominated in euros per megawatt Hour so that’s what these numbers are Here on the y2 axis so if you take a Look at this steady rise throughout 2021 This is actually showing that there was A problem brewing before the issues Going on between russia and ukraine Right now so this is almost a supply Chain breakdown for imported russian Gasoline and it only gets worse as you Can see in february of 2022 when this
Conflict started so even through the Winter it’s expected to get much worse As we’re starting to see right here so What has been going on in germany that Has led to this boiling point of having You know a thousand percent increase in One year So if we move forward this is how we Start to figure this out so the Installed net power generation capacity In germany this is showing uh 2002 to 2021 You can see all the different types of Capacity that they have installed in Gigawatt hours okay so down here you can See how since 2011 nuclear power is Actually the smallest amount or starting To become the smallest amount you can See hard coal they’re starting to shut Down coal plants but ironically they’re Turning them back on for this winter Which we’ll talk about later uh natural Gas has stayed relatively even Oil and then they’re starting to Actually increase the renewable Resources so 46 Of the energy mix is comprised of Renewables despite this in 2021 far more Energy was actually produced via russian Gas than wind and solar combined okay so You can see that here You can see that wind onshore is this Number right here 56.3 Solar is 58.4 and then we have russian
Gigawatt hours of 497 million 475 So the reason for this is because Unfriendly regulations for fossil fuels Um are starting to permeate throughout The entire european union uh Specifically in germany in this case uh Since basically the mid-2000s here Despite heavy reliance upon them so one Of the perfect examples of this and this Has actually been a debate in the states Now for a while is either you know Adopting more nuclear energy power Plants or shutting them down you can see Here in germany basically since uh 2011 Uh they actually started to shut them Down so a quarter of the nation’s Electricity Was nuclear until 2011 with 17 reactors Uh nuclear energy was basically the Little energy independence that germany Had we’re going to be talking about Energy dependence and independence in This video now only three reactors are Remain and they’re actually planned to Be shut off so you can see the rapid Divestment right there so as moving Forward you can see how ditching nuclear Made germany dependent on uh foreign or Import dependent on uh foreign energy so This gray line right here you can see The total electricity production by Source uh you know fossil fuels Obviously started to go down since mid
2000s as we can see here renewables Started to go up since mid 2000s as we Can see here and then nuclear basically Since 2011 we have that big dip and They’re trying to get away completely From this for the most part so what is Happening so after rapidly divesting From fossil fuels and nuclear energy uh Germany is now 63 percent energy import Dependent um so europe is actually going To bear the pain this winter and the Whole crux of this video is going to get Into how the european central bank may Have to loosen monetary policies sooner Than later Just to prevent a massive recession Because of energy prices So now that we’ve talked about germany Let’s actually take a look at a couple Other countries so this is a tweet from Andrea steno larson if you don’t follow Him i highly recommend it he’s been on Macro voices a bunch of times and many Other financial publications So why do we keep talking about the Energy crisis in relation to germany Only so if you look at this chart he’s Talking about france the united kingdom And italy are all priced to pay higher Electricity prices than germany in December of 2020 So if you take a look at this germany is Actually the yellow line right here Italy is pretty much in line with them
But if you look at uk their energy price Euro in megawatt hours is exploding but Take a look at france here in the orange Line It’s almost twice as much as the Next lowest person actually three times As much as the next lowest country So germany is the industrial center of Europe but other european countries Depend on natural gas more energy prices Rising hurts the entire european union But if germany goes down the backbone of The eu crumbles so obviously when one Domino falls You can see that the european central Bank may not have much hiking runway so This is a metric Published by joe consorty on tradingview That’s my research analyst this is the European fear gauge so you have the Italian 10-year yield the german 10-year Yield the higher the borrowing costs for The more fragile european union nations Get uh the more likely we see a pivot to Loose monetary policy uh you can see This happening in 2012 you can see this Happening in 2018 last time uh the American markets crashed before cerveza And then in 2020 cerveza right here so Hiking the policy rate while tightening Its balance sheet this could actually Make money too expensive it could Potentially bankrupt borrowers or Make it very difficult to service their
Debts especially if they don’t have Derivatives contracts In place meaning that they’re buying Energy now by with future prices if you Will or buying future prices now with Today’s dollars excuse me And that could send europe into a crisis When it’s already facing record energy Shortages so we’re already seeing the Warning signs occurring so as always This is not a fear-mongering channel i’m Just reporting stuff that’s going on in The world i’m not selling you uh Precious metals via a 1 800 number So how could you actually position Yourself so this is joe’s piece of Feedback here uh short the euro If you’ve been following the euro and Dollar One to one parity meaning that the Dollar is becoming very strong euros Becoming somewhat weaker In my lifetime i haven’t really seen the Euro strong Weaker than the dollar maybe like when It first came into existence maybe 20 or So years ago But i travel to europe you know very Frequently i have a lot of family over There And this is the first time that i’ve Seen it one-to-one as an adult so while The euro has already weakened Significantly against the dollar having
To pivot to credit expansion and Monetary easing to stave off this energy Crisis should weaken it further Number two this is my piece of feedback I’d be hesitant on energy sensitive or Energy dependent companies again if They’re not hedged with derivatives or Some sort of futures contracts Corporations are hurt financially due to Difficult or unserviceable borrowing Costs with the already massive energy Price inflation as we saw in the Previous slide and then this last one is A little bit more philosophical than Anything energy is life if you think About you know when humans first came Into existence we always from an Agricultural standpoint you know you Move where water is big bodies of water Rivers things like that However let’s not forget that our Ability to harness on verifying Microsoft outlook okay thank you our Ability harness energy in its most Immediate efficient form is the bedrock Of civilization europe slash germany is In a grim situation right now Specifically because they ignored this Fact So as always let’s get into my thoughts For this video so Typically I have a monitor over here to my left And i have like two or three bullet
Points written out just so i have a way Of concluding these videos in a logical Comprehensive way i don’t have any Bullet point videos or excuse me bullet Points for this video Just because if you’ve been following Geopolitics or eu energy policy or the Pipelines like nordstrom 1 nordstrom 2 For any number of years now you can see This coming from a mile away the eu is Becoming or has become too energy Dependent on certain actors uh such as Russia in this example who can easily Say hey you know i’m gazprom i have to Repair this pipeline uh i’m shutting Down your gas supply right obviously That’s an oversimplified um analogy just For the end of this video but the whole Point of this video is to show you that You need to be energy independent for The most part as a sovereign nation Because you don’t want to be beholden to Other countries On the whim of a decision of a certain You know political leader for example So um what are your thoughts down below I want to hear two two points so i have A lot of viewers that are in the united States i think it’s about 75 percent of You 80 percent of you are in the states The rest are basically in europe Overseas and australia for the most part What are your thoughts on nuclear energy And then what are your thoughts on being
Energy independent and dependent and Then also let’s hear your thoughts on Renewable energy as well um you know i Think renewable energy obviously has to Become the future one way or another Whether it’s through legislation or Morals or Virtues if you will But you know at some point you know People have to realize that oil gas not So much coal anymore um still creates And provides a lot of energy for the World So uh what are your thoughts down below As always i hope you got value out of This video um check out the waiting list For whiteboard finance university down Below that is my school it’s going to be Filled with a number of different Subjects taught by subject matter Experts For a very small monthly fee I think it’s going to be a ton of value And you’re also going to be able to get On live streams with me once a week for About an hour i’m an open book on all of Those so thank you so much for watching And as always have a prosperous day You