By Michael Snyder
This thing in Europe is rapidly becoming rather serious. Vladimir Putin’s decision to end the flow of gas through the Nord Stream 1 pipeline has caused an enormous derivatives crisis to erupt in Europe, and it is going to take a giant mountain of money to fix it. Some are already referring to this as a “Lehman Brothers moment” for the European financial system, and authorities all over the EU are really starting to freak out. We haven’t seen anything like this since 2008, and if the Europeans are not able to contain the damage we could soon see a tsunami of financial panic sweep across the entire globe.
It is being reported that energy trading in Europe “is being strained by margin calls of at least $1.5 trillion”…
European energy trading is being strained by margin calls of at least $1.5 trillion, putting pressure on governments to provide more liquidity buffers, according to Norway’s Equinor ASA.
Aside from fanning inflation, the biggest energy crisis in decades is sucking up capital to guarantee trades amid wild price swings. That’s pushing European Union officials to intervene to prevent energy markets from stalling, while governments across the region are stepping in to backstop struggling utilities. Finland has warned of a “Lehman Brothers” moment, with power companies facing sudden cash shortages.
We aren’t talking about 1.5 million dollars.
We aren’t even talking about 1.5 billion dollars.
1.5 trillion dollars is a colossal amount of cash.
To put this in perspective, if you were able to create a stack of one trillion dollar bills it would be 67,866 miles high.
So a stack of 1.5 trillion dollars would be over 100,000 miles high.
We often use the phrase “a mountain of money” rather flippantly, but this really would be a colossal mountain of money.
The problem is not with the physical markets. Rather, we are being told that 1.5 trillion dollars in “liquidity support” will be needed because derivatives trading has gone completely haywire…
“Liquidity support is going to be needed,” Helge Haugane, Equinor’s senior vice president for gas and power, said in an interview. The issue is focused on derivatives trading, while the physical market is functioning, he said, adding that the energy company’s estimate for $1.5 trillion to prop up so-called paper trading is “conservative.”
1.5 trillion dollars is the “conservative” estimate that we are being given right now.
That means that the final bill will likely be in the “trillions”.
Where is all of that money going to come from?
Over the years, I have done so many articles about the dangers of derivatives.
Is the inevitable global derivatives meltdown finally upon us?
At this point, one option that the European Commission is considering is the “temporary suspensions of derivatives markets”…
The European Commission is also examining measures to help with liquidity. These could include credit lines from the European Central Bank, new products as margin collateral, and temporary suspensions of derivatives markets, according to a policy background paper seen by Bloomberg News.
If they actually decided to temporarily suspend the trading of derivatives, that would actually create even more panic.
This entire crisis could be solved if the war in Ukraine ends and Russian gas starts flowing back into Europe.
But that isn’t going to happen. Neither side is going to back down, and there will not be peace any time soon.
And so this is going to be a very bitter and very cold winter for Europeans, and the Russians are openly taunting them…
Russia’s state-controlled energy giant Gazprom has taunted Europe with a sinister video warning about a long winter with snow and ice sweeping across the continent.
This is going to be bad.
And things are going to stay bad until there is peace with the Russians, and the truth is that peace with the Russians may not happen at all.
Months ago, Western leaders were openly bragging that they were going to crush the Russian economy.
It turns out that Europe is the one being crushed instead.
Summer is almost over, winter is coming, and the Europeans are completely and utterly unprepared for what is coming next.
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About the Author: My name is Michael and my brand new book entitled “7 Year Apocalypse” is now available on Amazon.com. In addition to my new book I have written five other books that are available on Amazon.com including “Lost Prophecies Of The Future Of America”, “The Beginning Of The End”, “Get Prepared Now”, and “Living A Life That Really Matters”. (#CommissionsEarned) When you purchase any of these books you help to support the work that I am doing, and one way that you can really help is by sending digital copies as gifts through Amazon to family and friends. Time is short, and I need help getting these warnings into the hands of as many people as possible. I have published thousands of articles on The Economic Collapse Blog, End Of The American Dream and The Most Important News, and the articles that I publish on those sites are republished on dozens of other prominent websites all over the globe. I always freely and happily allow others to republish my articles on their own websites, but I also ask that they include this “About the Author” section with each article. The material contained in this article is for general information purposes only, and readers should consult licensed professionals before making any legal, business, financial or health decisions. I encourage you to follow me on social media on Facebook and Twitter, and any way that you can share these articles with others is a great help. These are such troubled times, and people need hope. John 3:16 tells us about the hope that God has given us through Jesus Christ: “For God so loved the world, that he gave his only begotten Son, that whosoever believeth in him should not perish, but have everlasting life.” If you have not already done so, I strongly urge you to ask Jesus to be your Lord and Savior today.
