” Alert. Towards a Lehman Brothers moment with the explosion of the gas derivatives market! » Editorial by Charles SANNAT

My dear impertinents, dear impertinents,

It smells of gas… don’t you think?

In any case, this is what the German authorities think of the financial markets, for the rest, and given the shortage of gas which is taking hold in Europe due to the reductions in deliveries imposed by Russia, the Europeans would no doubt like to be able to smell the gas!

And I let you imagine this winter, when the thousands of gas boilers in low-rental housing will no longer be able to give 19 or 20° and we will curdle north of the Loire…

Here is what the American financial press agency Bloomberg reports to us.

Germany has warned that Russia’s moves to cut Europe’s supply of natural gas risk causing a collapse in energy markets, drawing a parallel with the role of Lehman Brothers in triggering the financial crisis.

With energy suppliers racking up losses by being forced to hedge volumes at high prices, there is a risk of a contagion effect for local utilities and their customers, including consumers and businesses, it said on Thursday. Economy Minister Robert Habeck after raising the country’s gas risk level to the second highest ‘alarm’ stage. »

The problem is the derivatives!

In Europe we wanted to play deregulation and play “what if the energy market was free, then it was a market like any other”.

So we let a lot of players and alternative suppliers prosper, who serve absolutely no purpose except to issue invoices with a new logo giving the illusion of choice. They are useless because they have neither the distribution infrastructure nor the extraction or manufacturing capacities! It is therefore just commercial structures that buy at wholesale prices to resell at retail the energy that they are unable to produce and distribute.

They will therefore die in atrocious economic suffering and this is generally what happens to “businesses” without added value.

But they will take a lot of people with them, starting with the banks… and yes, the world of finance within the framework of the “free” markets can create plenty of derivative products that allow you to hedge against everything and against nothing…

I can play up or down, guarantee myself a price or a course. The problem is that I can guarantee you a gas course for next year, but if there is no more gas, here I am! If in addition I sold in advance gas that I do not have and that I will never have because Russia does not want to deliver any more, I am potentially as ruined as bankrupt! And the banks too.

We are going to experience a new Lehman moment due to the Russian gas cuts!

So we’re going to have another Lehman moment, but… rest assured, we won’t let our banks down and central banks will print enough money to erase the losses.

Against financial losses central banks like the FED and the ECB can do everything!

Against the absence of gas, they will not be able to do anything to prevent you from shivering this winter.

If the gas derivatives market explodes, and that would be quite logical, banks, companies and other institutions will probably be saved by States and central banks precisely to avoid a Lehman crisis which would cost much more.

By saving the system we will create money.

By creating more money, we will increase inflation.

By strengthening inflation, we will accelerate the price of gold.

Gold will therefore rise more than the banks will go bankrupt.

Come on, don’t worry, to paraphrase one of our ministers, I’d say it’s going to be fine.

It is already too late, but all is not lost.

Prepare yourselves !

Charles SANNAT

“Insolentiae” means “impertinence” in Latin
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