Sweet China Rescues Poor Man Europe!

No, China hasn’t. But that’s not what you’d think if you read the Nikkei. Were you forwarded this email? [Sign-up to Rude Awakening here.]( [The Rude Awakening] August 31, 2022 [WEBSITE]( | [UNSUBSCRIBE]( Sweet China Rescues Poor Man Europe! - If you believe that, I’ve got a cute bridge over the Thames to sell you. - Now China is reselling boatloads of Russian LNG to Europe. - China and Russia are both laughing at the European “elites.” Recommended Link [URGENT: Your Link.]( [Click here for more...]( Here’s your new link: [Secure link for you]( Jim can barely contain his excitement. He can’t wait to tell you about his newest reveal… …and what it could mean for YOUR financial future. [Go Here Now]( Sean Ring Editor, Rude Awakening Happy Hump Day! A lot is happening in the charts, but I want to wait until today’s market close to make any calls. Tomorrow’s monthly asset class report will have plenty of them, especially as this sucker’s rally is well and truly over. In the meantime, I want to build on [yesterday’s piece]( where we discussed how sanctions are wrecking Europe. But it’s more than that. Sanctions wreck incentives and make governments do stupid things. And when Ursula dan der Leyen is running things, you’ve got plenty of stupid to start with. And boy, have I got some stupid for you today! [Nikkei Asia]( ran an article that its sister paper, the [Financial Times]( picked up. [ZeroHedge]( then ran with it in a comical rehash of Europe’s oil and gas idiocy. It’s nothing that will surprise you. You already know China has essentially saved Russia’s bacon. The rest of the Global South is, if not pro-Russia, at least not anti-Russia. But this takes the cake. It’s not just India reselling Russian assets to the feckless Europeans. The Chinese are in on the act, as well. And Europe hasn’t uttered a peep about it. Let’s get ready for a ride on the natural gas merry-go-round. China Buys Billions in Russian Gas It started with a [South China Morning Post]( piece, “China snaps up over US$2 billion of Russian LNG as energy trade bucks economic downturn.” It notes China bought 2.35 million tons, valued at $2.16 billion. Imports from Russia increased by over 28%. Imports from all other countries declined. Quickly: pipeline gas and LNG are the same natural gas but different in how they’re transported. Pipeline gas is quick, easy, and cheap to transport, which is why Nordstream I and II make so much sense for Europe. Of course, the same economics apply to pipelines heading to Asia, like the Power of Siberia I and II. Pipeline gas isn’t altered in any way. It’s sent through pipelines in its gaseous form. LNG is liquefied natural gas. LNG is natural gas that has been cooled down to liquid form for ease and safety of non-pressurized storage or transport. It takes up about 1/600th of the volume of natural gas in the gaseous state. Because you’ve got to cool and ship the gas on specialized vessels, LNG is more expensive than pipeline gas. But LNG has the advantage of being able to be diverted when it’s already aboard a ship to the most profitable market. Now that that’s out of the way, we’ve seen China import much more LNG from Russia. This is odd, as China’s economy has slowed down, and the demand for natural gas has diminished. So what gives? It seems China flipped the LNG… back to the feckless, virtue-signaling Europeans. China Sells the Gas to Europe From [ZeroHedge]( (bolds mine): Well, we now know the answer: China has been quietly reselling that evil, tainted Russian LNG to the one place that desperately needs it more than anything. Europe... and of course, it is charging a kidney's worth of markups in the process. As the FT reported recently, "Europe’s fears of gas shortages heading into winter may have been circumvented, thanks to an unexpected white knight: China." The Nikkei-owned publications further notes that "the world’s largest buyer of liquefied natural gas is reselling some of its surplus LNG cargoes due to weak energy demand at home. This has provided the spot market with an ample supply that Europe has tapped, despite the higher prices." What the FT ignores, perhaps intentionally, is that it's not "surplus" - after all, if it was Chinese imports of Russian LNG would collapse. No - the correct word to describe the LNG that China sells to Europe is Russian. This is a complete joke. Europe’s virtue-signaling about being off Russian gas is a charade. But that’s not the worst of it… Recommended Link [Federal Ruling does WHAT?]( [Click here for more...]( The Federal Government just passed an obscure new ruling. It could change your life in ways you’ve never thought possible. And help some Americans make a small fortune in the process. [Click Here To Learn How]( Europe Pays For the Gas and the Increased Mileage Independence from Moscow? Bah! Italian freelance journalist Mauro Bottarelli wrote in [money.it]( Too bad that there are at least a couple of critical issues. The first is the costs. In fact, if the gas purchased from the Netherlands and Norway is affected by the increase in prices and a cost that is structurally higher than the Russian one, this explains why - at the same time as the 20% thud of the valuations of futures contracts in Amsterdam - the energy contract at 1 year of Germany on Monday broke through the 1,000 euros per MWh for the first time ever. And that, even more disturbing if seen in perspective, the already rescued [German energy company] Uniper has once again beaten the State for another 4 billion euros, as it is forced to spend something like 100 million a day on the spot market to buy gas not of Russian origin. In short, independence from Moscow is fundamentally false because it harbors unsustainable costs in the short term. And here is the second criticality. Because the Financial Times gave a name to that [category] Sonstige Länder (Other Countries), which in the graph already accounts for 23% of the total gas imported from Germany in August: China. And, further irony, the liquefied gas that Beijing is selling with the shovel to Europe is none other than the Russian one from which Berlin and its associates claim to have freed themselves. The graph to which Signore Bottarelli refers is this, which shows where Germany gets its gas from: Credit: [money.it]( So let’s get this straight. Russian gas is making its way to Europe via China. That’s the same China that’s saved Russia’s bacon yet is a “white knight” for selling “surplus” LNG to Europe. It seems that Europe didn’t trade one energy master for another. What Europe is doing is paying a premium to buy Russian gas, so it looks like it’s buying Chinese gas. It’s an absolute sham! Wrap Up Both Czar Pooty-Poot and Emperor Pooh are laughing their heads off. Russia sells its gas to China. China rips off a willing Europe. Russia and China make boatloads of cash off the European taxpayer while Eurotrash politicians like [the moron running Germany claim the sanctions are “really effective.”]( There are no words to describe this. Unless and until the European citizenry understands inflation is a tax and that this taxation, in particular, is theft, nothing will resolve the situation. Europe virtue-signals to Russia while giving China not just a pass but a pat on the back. You can’t make this up. Well, they say truth is stranger than fiction. This is a case in point. Until tomorrow. All the best, Sean Ring Editor, Rude Awakening [ARCHIVE]( | [ABOUT]( | [CONTACT US]( Rude Awakening is committed to protecting and respecting your privacy. We do not rent or share your email address. By submitting your email address, you consent to Paradigm Press delivering daily email issues and advertisements. 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