Eating Out Chatter

 Last night, the wife and I went out to eat...at a fairly well known German restaurant in the local area, and I ordered Cordon Bleu.

Normally, before the Covid era, this would be priced at 11 to 12 Euro per plate.  

Last night?  21.50 Euro for the plate.  

I looked across the menu, and most everything was 25-percent minimum up from where it was in 2019.  Some were up to 50-percent higher.  

Affecting people eating out?  I would think more than a third of German society is going to be fairly picky about eating out, and most restaurants will be shut down for three nights of the week, as we go into the fall.  

Q-and-A

 1.  Ukraine on a 'win-streak'?

Well....for the past ten days....the Russians have shown a nature to retreat.  There was long forecasted that as August-September came.....more advanced weapons would arrive for the Ukrainians, and the evolution of the war would take place.

Right now, there's around 10,000 Russian conscripts in a 'pocket' and without much on logistical support.  They need to be removed, or face some kind of surrender.  I expect this trend to continue through October and November.  

2.  The CDU Party in Germany (Merkel's old group) setting a quota for women in leadership?

Yes, from party members.....for leadership positions, there has to be a fairly level playing field by the new rules established.  Not a positive or negative.....just a situation to say the CDU desire to be like the SPD and Greens.

3.  Did the German Association of Towns and Municipalities come out with a worry statement yesterday on blackouts this winter?

Yes, but it was aimed at retirement homes and hospitals....suggesting they were not prepared for this event.  

4.  Another scandal brewing for public TV/radio?

N-24 brought up this issue of directors/executives going off on meeting trips/conferences....without any oversight/audit of cost/expenses.  There's some effort going on to show 'permissions' but it'll beg the question....how has money been spent the past decade?  

5.  Some chatter going on in Germany to nationalize the power companies? 

Yes, but mostly from the far left, and there's no real public support at present for this idea to occur.  

6.  Coke versus Edeka (the grocery chain) war going on?

Well....Coke raised its prices and Edeka said 'no'.....to the extent that they won't allow delivery or sales within their grocery chain.  Coke is upset about this, and even tried to get the court to order Edeka to sell their sodas.  Yesterday, the court said 'no'.

What Coke runs currently in the 1.5 liter container?  Around 99 Euro cents, with the quarter deposit fee on the plastic container.  I should note, if you were buying in the smaller containers or cans.....it is a bit more expensive per ounce.

I should note that I regularly use Edeka and they have a fair amount of drink competition so you don't really miss Coke that much.  

The 'Power-Barges' Idea?

 In the last week or two, if you watch German government officials on TV....this power-barge idea came up.

So to explain this....you'd have some floating power-plant (on the high seas) which would have oil-tankers come up and fuel them up....then the barge 'spurts' out electricity via a line to the coast, and delivers this to consumers.

Risk-factor?  I looked at this idea, and just shake my head.  A serious storm, and some tidal wave hitting....could toss the barge and create a massive problem for clean-up.  

The necessity of a barge instead of a regular land-plant?  Well....you wouldn't ask permission of anyone, and it could not be delayed for months or years in court.

In a Green Party frame of mind....it makes perfect sense.

On risk-taking?  Out of a 1-to-10 situation.....I'd give it a 'eight'.

You might as well create a floating nuke-plant-barge and run it thirty miles off-shore, and lay the cable from there to the coast.  

Excess Profit Chatter And Reality

 In recent weeks, political folks at the EU and in the Bundestag have jumped on excess profit, and say they will micromanage this....taking the excess profit away.

So, lets say I run a bowling ball manufacturing plant in Mainz.

Each year, as the owner, I generally took home around 1,700,000 Euro profit.  

Lets say that the excess profit crowd came to the building and announced that the 1,700,000 Euro profit was over their agenda amount.  Their feeling?  They'd take a cut of the 1,700,000....probably around 50-percent....leaving me with 850,000 Euro instead.

Maybe I was accepting this....but I think most would not accept it.

So I would start to re-build my business.  The actual bowling balls themselves?  Instead of making them in Mainz, I'd go to a country like Poland or Czech....believing that they would never allow the EU to get deep into this business.  

I'd make the balls there, and ship them by truck over to Mainz....to drill the holes.  I'd dismiss 90-percent of my Mainz employees in the process.

I'd also plant my business headquarters in a country like Cyprus.  The German name would still be on the ball, and it'd say 'finished in Germany' (while made in Poland).

What would happen?  About two years into this great campaign to take excess profit away in Germany.....politicians would wake up and realize that 2.5-million jobs disappeared from companies shifting to the east.  

Suddenly, the excess profit agenda would be halted.  But by then....it's too late, and the companies won't move back.

So a year or two will pass....with tax revenue lessening and political folks appearing on public TV to explain what happened.  They'd eventually beg for forgiveness, and create 'tax credits' for new companies to move into Germany....taking the money for this....from regular tax-paying citizens.

To be blunt, I'm not worried about the excess profit chatter.  It will lead to a evolution in Germany where you have lots of people on unemployment and no real employment landscape for them to thrive or work.  Less tax revenue....means less money being funneled into public projects.  In a decade, Germany would be made into another 'Italy'.  

My bowling balls?  They'd still be around.  And yes, I'd still have my 1.7-million in personal profit off the business.  

The Natural Gas Landscape

 There is a terrific piece at NDR (public TV for the Hamburg region) which talks about the reserves.

If you go by the numbers (government statistical data), then it's a pretty positive story.  Three significant facts:

1.  Natural gas consumption has trimmed back since the 'worry' started.  Germans are presently using around 85-percent of what would be 'normal'.  

2.  The national reserves?  If the numbers are correct....as they exit winter in 2023, forty-percent of the reserves (at present pace) will still be there.  This would mean a normal winter.

3.  Norway, Belgium and Netherlands have stepped up production and shipment of natural gas into Germany.  A lot?  No.  But a percent here and there....does add up.  Norway pretty much admits that they are at absolute top production and shipment.

The LNG game?  Yet to be a player, but once the first ship docks and unloads....I suspect worries will drop a bit.

Pricing of natural gas?  Another story (by NDR).

A year ago, 1 Kwh of natural gas was running at 5.8 Euro cents.  

Today?  The same 1 Kwh is running around 38 Euro cents for new customers.  Yeah, existing customers (long-term) will pay less.  

Six times the rate?  Yeah, and that's really the heart of the issue.  A guy who heated his place for 18 hours a day in the past....probably will try to go to 12 hour day where it's marginally heated when no one is around the home or people are sleeping.  

It wouldn't shock me if working-class Germans kept their place heated to 16 C (61 F) and used an electrical heater to occasionally bounce the temp up four degrees.  

If you were looking for real estate deals where large sized homes are selling for one-quarter less....then watch the market in the summer of 2023.  

Did The Russian Artillery 'Game' Stall Out?

 Well....it's interesting.  From March onto July, the Russians were hyped-up on use of artillery, and it was a major part of their limited success story.  

In the past month....you don't see that much on artillery use.

I sat and listened to a podcast, where the discussion came up about a maximum number of rounds fired per artillery piece, where the barrel is no longer 'safe' (effective).  Typically, it's around 1,000 to 2,000 rounds fired (per modern barrels). 

So they were suggesting that the limit has been reached and there's just not that Russian capability existing to mass produce replacement barrels on a bulk scale....that you'd need for a military operation like this.

This already arriving in May?  Well....you notice a lot of use of rockets by the Russians in the May/June period.  Maybe the switch occurred even earlier.

What this leads to?  Well...unless they make new artillery barrels or bulk-buy off India, North Korea or China....artillery isn't going to be a big player for the next phase of the war.  

At the rate that tanks and artillery are being removed from the situation?  It's a different kind of war, and not one that would be beneficial to the Russian game plan.

Will Natural Gas Pricing In Germany Ever Return To Normal?

 I watch a lot of business news and probably read through fifty-odd articles per day.  All of this natural gas chatter in Germany goes mostly to the 'new' cost of things....being between three and five times what it was a year ago.

So my general question....once we emerge from winter in April of 2023.....will thing settle into a norm, and possibly retreat from this current situation?  

I've come to the opinion that it will NOT return to a normal level, and this three-to-five times rate....will be the new norm, possibly for several years.  The Russia cheap-route?  Well....the gimmick worked to the point....that now, it won't work.  

What's this translate to?  Three big issues:

1.  Industry that made profit and provided jobs in Germany.....will not be able to compete against countries that had a interior supply or non-Russian situation going on.  You will see a rapid slow-down in German profits over the next year or two.  Jobs will be a problem.  

2.  Natural gas heated homes will go through a transition.  Even if you had a a relatively new furnace.....your view will be that a cheaper method has to be procured, or an alternate heating method established.  I'm not saying solar is the answer....just that something has to evolve on a fast basis.

3.  Fracking will be accepted by the public in Germany.....even if environmentalists are wired to be against it.  By spring of 2023, I will predict that this is a top ten issue, and will be something that more than half the population accepts.

Social unrest coming?  Well....it will affect voting but there are only three elections at the state level in Germany for 2023.

Attack in Ansbach?

Around 6 PM yesterday, as folks were attempting to get home....an incident started up at the Ansbach train station (town about 20 miles SW of Nuremberg, deep in the heart of Bavaria).

What the cops say (via BR)? 

Some guy (age 30) pulled out a knife, and just started attacking folks....uttering the phrase 'Allah Akbar'.

Wounded?  Apparently two folks were cut, but not in mortal danger.  

As in most major train stations.....police patrols are a big deal, and within a minute....they were on the scene....telling the guy to cease.  No reaction....they pulled their sidearms, and fired.  Guy was dead at the the scene.

Muslim radical?  Well....here's the thing, as time passes and you examine cases like this, it usually turns out that the guy was a non-German and had mental issues (like paranoid schizophrenia for example).

Nutcase?  The police say one interesting comment: "We know who he is."  This typically means that they've had run-ins with the guy before and he is a known 'character'.  

I know that some folks will pick up this and say it was a terror episode, but if you gaze at news reports over the past five years....you just see this mental issue come out more and more.  Most of these episodes are not planned and just the spur-of-the-moment.  The script?  A guy gets unhinged and does really stupid crap.