Transcript
Automated transcript · uncorrectedWith us today. Is Mario Economo, a banker in Zurich, London, New York, and you know he lives in Europe mostly and he fills us in what the heck is going on in Europe? A Mario, it’s a hot Sunday in New York. Tell us what’s going on in Europe and how are they faring?
Yes, good morning. It’s actually a very warm summer in Europe as well. We are seeing very warm temperatures in the United Kingdom, across France into Switzerland, and Greece is expecting a very long lasting heat wave starting this weekend.
So the heat’s basically everywhere. Let’s just touch on a couple of subjects with respect to what’s been going on in Europe. Many people in America, I’m sure, have seen the riots that have been happening in France and the various cities there is the result of a police shooting of an unarmed individual who was actually a teenager driving
a car. The cities exploded. People basically literally exploded. People basically started tearing everything down and burning the city’s Paris, many of the other cities, Marseille, Leon city halls were burnt. It was actually a crazy situation, so much so that the government, the French government, actually sent in armored vehicles to quell the unrest. Things have quietened down a bit,
but again this point to much larger and deeper issues in French society that continue to simmer and with any small catalyst, they actually explode on the streets. One thing we should discuss also is we should say that President macarn of France did ask the supermarkets in France to drop their prices by ten percent, where they would have
to face financial sanction, and the good news is many of the supermarket chains agreed to do this. The bad news, unfortunately, is when the government gets involved at that level and it actually tells companies it’s going to sanction them financially if they don’t do something. That’s also not necessarily a good thing. They continue to have extreme food inflation across
the European Union, and the reason for this is because many of the farms, as we’ve discussed on your program, have actually closed. Many of the livestock, cattle and other have been culled due to the high cost of feed, and therefore that’s driven up prices of things such as dairy products like milk and cheese, eggs, of course have
been very expensive, and meat products in general have been very expensive. So inflation continues in Europe unabated, notwithstanding the consistent rise and interest rates in both the United Kingdom and the Eurozone as well.
Well, that’s a are they going to continue? You know? The United States, there’s an economic core going on between the United States and Russia and Saudi Arabia over oil. I mean, Russia and Saudi Arabia won ninety dollars oil.
The United States won sixty five dollars oil. And nobody really knows if Saudi says they’re cutting it, but they’re bluffing in most of the time. Have you heard.
Anything, No, you’re right to Saudis and the Russians would like oil to be much higher than where it’s at right now, and the Americans, of course, would like it to be much lower. America does have a say in this, because America could turn on the spigots and could produce substantially larger quantities of oil and could literally flood the
market and drive the price down. But that’s a discussion that the American electorate needs to have with their government and with their president. Europe, for its part continues to import oil. We haven’t seen dramatic increases in the price at the pump, and principally that’s because oil overall is down. However, food inflation remains stubborn, and even though people had said
when energy inflation drops, so wil food inflation, the reality is it has not, and the reasons for that are some profiteering by supermarket change. It’s openly being discussed by people now, but I suspect also there are some longer term lag periods between when oil and energy inflation comes down and the actual cost of food food products comes down.
I would like to touch on one other thing as well, and this has to do with Intel, the company that manufactures computer chips. They’re actually going to be building two chip plants in Germany. It’s a thirty three billion dollar investment, of which one third the German state is actually going to cover. Intel also announced they’re going to be building
a four point roughly four and a half billion chip plant in Poland as well. And we now see that US companies are actually trying to actively get involved in the production of computer chips in Europe so that they don’t over rely on the supply chains coming out of Taiwan.
Is this a good thing? I think it is. You’re going to need computer chips to be able to put into the various alternative energy wind and solar plants that are going to be created in Europe, so I think this is a smart move that they’re doing. But again we see once again the German state actively participating in
this investment. Roughly one third of that investment is going to be funded by the German state, So once again we see that the largest provider of funding to many companies today continue to be countries themselves, and again people need to decide if that’s a good thing or a bad thing. We also did see one other thing at
the Paris air Show, and this was air by US, the company that manufactures airplanes, closed the biggest deal in plane history, and specifically it sold five hundred narrow body jets to an Indian budget carrier called Indigo. That is a huge sale, five hundred planes, unheard of. But again, India is today the world’s most populous nation and it’s
expecting an explosion in travel. But again it begs the question if in the European Union, they’re now saying they’re going to essentially outlaw flights which are two hours or less within the European Union. But people in India continue to fly unabated on flights which they could alternatively take by train like they’re doing in Europe. Then what is
Europe actually accomplishing with respect to climate change if India is not going to participate as well. So you’re essentially hurting the Europeans and the economy in Europe while you’re allowing the Indian economy to develop and to grow aggressively.
I understood anything new on your energy with France or Germany.
No, Germany did close its nuclear power plans as like it said it would. Right now, it’s summertime, there’s not that much demand for energy, at least not as much as there is in the winter months. This will be a hot summer, it looks like in Europe, so we’ll have to see what the demand is going to be.
With respect to the air conditioners, but many countries in Europe have actually told their various city services, etc. That they’re not allowed to actually lower the thermostats below a certain level. So that’s going to actually not make it as cool as it used to be inside buildings. Let’s touch on one last thing as well before we close today,
and that has to do with Turkey and the upcoming rather I’m sorry, Turkia and the upcoming NATO meeting where Sweden’s acceptance is to be discussed. Up until today, Turkia continues to hold a strong line in its position against allowing Sweden to join the NATO Alliance. It is continuing to essentially say that Sweden harbors terrorists and unless the
laws change and those terrorists are extradited from Sweden to Turkeia, Turkia will hold its line and it will not allow Sweden in. The reality is, nobody knows what’s going to happen, and it’s going to come down literally to the actual meeting in the Baltic States that’s upcoming in the following week to see what Turkeia is actually going to do
with respect to Sweden.
Well, Mario Konamu, thank you for the update and we’ll talk to you again real soon.
Thank you. Enjoy your Sunday
Sunday, July 9, 2023
Eric Shuffler
Founding Partner, River Crossing Strategy Group
4 PM Today Charleston Dirty Birds at Staten Island FerryHawks
