01. Germany on the Brink of Bankruptcy
Although Germany had previously been very optimistic about being able to weather the energy crisis this winter, German media reported just before the end of the year that Vice President Kubicki believes there is no solution to the energy crisis yet, and Germany could become one of the bankrupt countries.
Clearly, Kubicki was not speaking off the cuff; he also provided detailed data. Unable to obtain energy supplies from Russia, Germany can only purchase energy from other sources, which requires an additional expenditure of up to 110 billion euros. He further pointed out that this money cannot be passed on to taxpayers, nor can it be printed at will. If the energy crisis cannot be well resolved, it is difficult to guarantee that Germany will not become one of the bankrupt countries.
02. European Crisis
As the largest economy in Europe, Germany may potentially go bankrupt, making the entire Eurozone even more dangerous. Europe has not yet escaped the threat of inflation. At the same time, although natural gas is temporarily sufficient for this winter, Europe still faces a shortage of natural gas after the winter. If liquefied natural gas is purchased from the United States or other channels, the price will be significantly higher than the long-term contract natural gas previously purchased from Russia.03, U.S. Financial Nuclear Bomb
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Not only is Europe in trouble, but the U.S. economy is also in a slump.
In the first and second quarters of this year, the U.S. had technically entered a recession, but due to a surprising 3.2% increase in GDP in the third quarter, it appears that the U.S. has temporarily escaped the recession.
However, the U.S. is facing a larger financial nuclear bomb crisis. If the U.S. debt bubble crisis is triggered, the U.S. will fall into a more severe recession than in 2008.
Currently, the total debt issued by the U.S. is approaching the debt ceiling of $31.4 trillion, but the U.S. has not considered how to reduce its debt, only thinking about how to get Congress to raise the debt ceiling.
04, Joint Selling
However, the continuous issuance of debt requires a sufficient number of buyers. Currently, it seems that the liquidity of the U.S. debt market is becoming increasingly depleted, and the force of selling is far greater than the force of active buying.
In October of last year, the ten largest overseas central banks holding U.S. debt held a total of $4,879.4 billion in U.S. debt, but by October of this year, their holdings had decreased to $4,491 billion, with a cumulative sale of $388.4 billion, which means that these ten central banks have reduced their holdings of U.S. debt by 8%.
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