The cash that the governments printed via negative interests to give to the VCs and to real-estate owners really skewed the local market (increasing both prices and costs of producing).
The Estonian gov has basically no tools to fight against the real estate bubble either or to bankroll the most fragile startups (and they may not be as strong as they seem), so we're basically fucked.
Regarding energy, we had 4000 EUR / MWh prices a couple of weeks ago for an hour.
Think of it as oven / sauna / air conditioner costing you 10 to 25 euros per hour (if I remember right, it didn't matter that much when you have no other choice than turning them off).
For energy this is mostly because of the war, but ecological policies also affected (Estonia was known for "dirty" petrol, known as shale oil, and they are restricted there).
The only retail companies that try hard to provide good prices are LIDL and IKEA, and in that regards, they are great.
Other distributors have very poor logistics as they consider Estonia as the very end of their distribution chain (no matter if for Baltics, or for Scandinavia we are at the end of the West).
"The cash that the governments printed via negative interests to give to the VCs and to real-estate owners really skewed the local market as well (thus increasing prices)."
Finally someone who undestood this was not linked to the war in Ukraine, but to the policy of the ECB to print money at will.
IMHO free movement of capital without free movement of labor is a true plague.
Any country that has achieved good living standards sees their citizens pushed out of housing by the rich people of other countries. Since the inflow is capital-only, you don't see inflow of people who can contribute to the society but you see people who come and consume resources just because they made wealth buildup oversees.
People like to blame it on immigrants but when working class immigrants come they works their a*ss off and contribute huge amount into the society.
It's almost like enslavement.
Someone in a corrupt county somehow builds up some wealth, which is essentially what the society owes them(IOU). Normally they would figure out what is actually owed to who by themselves but they take that IOU's and move to, let's say a country that has good living standards, like Portugal. Now the government is happy about it because they have IOU inflow that they can tax or stir up the economy but these rich people often don't use the IOU's to bring machinery or pay Portuguese to do research or anything like that. What they do is real estate investments.
Normally that would have been O.K. but since that money is not moving in a free market(remember, only the money can move. It's very hard to move around people and services), what you have is extreme market movements due to extreme capital movements without extreme movements in labour.
For example, when a Russian oligarch brings 10 billion dollars to London, suddenly huge demand is created but Russians who owe the oligarch the services can't come to build houses needed. Obviously their money goes into other parts of the British economy but you end up with Russians in poverty, overpaid people in some sectors where the oligarch money flows and local residents who cannot afford to pay rent despite working very hard.
That's why I'm proponent for restriction of capital movements wherever there are restrictions on human movements OR removing all restrictions on all kind of movements. In the first case we will have a patchy world where those societies who got their act together flourish(but they might do nasty things to the weaker ones. Also we lose many benefits of globalisation, like specialisation) and with the second option we will have an equalised world based on merit(however the transition will be very painful for those who are in a good standing currently, it also takes generations to learn to live together).
This makes no sense, the majority of the inflation is simply due to rising energy prices, what does the small Estonian startup scene have to do with any of this?
That's not the full picture. Demand for gas is still down below pre-pandemic levels.
Inflation may be too much money chasing too few goods, but the "too few goods" part is absolutely crucial here. And if we want and expanded economy, the "too few goods" part should be the focus.
The utter stupidity of thinking that sanctions could be an effective response or deterrent to military aggression boggles my mind. Force must be countered with force, nothing less. Anyone willing to expend soldiers lives is not going to be deterred by mere economic pain (the pain they've already chose, i.e. war, is much worse!). We don't impose monetary fines on murderers, we capture them and put them in jail, or kill them in the process.
Furthermore, sanctions, by definition, hurt both parties. It is impossible to design a boycott that doesn't hurt both the buyer and the seller. The only question is: who gets hurt more? If Europe was so determined to "stand with Ukraine" then they should've put soldiers on the ground over there, not shot themselves in the foot with sanctions on goods that they need.
> We don't impose monetary fines on murderers, we capture them and put them in jail, or kill them in the process.
Depends on the murderer.... sometimes we send them more soldiers to help them in places like afghanistan.. and syria.. and iraq.. and many more.
I live in a very small eu/nato country that noone cares about, and we still do it... so my taxpayer money is used for occupying eg. syria right now, in a conflict we literally have no interest in and profit nothing from.
I think (though I'm just regurgitating something I read somewhere) that the idea behind sanctions is not to use them. If you're using them, they've failed, in a sense.
So the idea is not so much to "stand with Ukraine", it's to stand with whoever is next. The threat of sanctions should be enough to prevent the future use of force, but you have to be prepared to pull through when they're ignored for that to work.
The sanctions ensure that even those Russians who don't send their children to fight and die in Ukraine feel the effects of the war. Plus if Europe out boots on the ground the chance of nuclear escalation is increased. Sanctions are part of the package, not the whole package.
Also Europe doesnt need Russian gas. It has become reliant on it sure, but it is weaning itself off that and that gives them more power and Russia less in the long term. Your points look at the immediate short term (less than 12 months) and does little to consider beyond that timeframe.
Sanctions made things worse, but Baltic countries and Poland were leaving Russian and Belarusian gas, oil and coal for long time making it not great before Russia attacked Ukraine. Estonia left Belarusian gas a month before the attack, same as Poland banned import of Russian coal causing shortage of coal locally. The countries were doing it for decades, slowly but surely moving to others sources of fuels. The sanctions only accelerated this energy crisis that was in the making. The countries are not super relevant and I wasn't able to find many sources for it in English, but here are some:
This comment is not going to age well. Russian positions in Kherson and Kharkiv are collapsing like dominoes. The price that Russia is receiving for their oil due to sanctions is approaching their cost of production. Most Russian natural gas production is being flared off rather than being sold. European natural gas storage tanks are 80-95% full. 6 new LNG terminals are coming online in December. Rather than 40% less gas this winter, Europe will have 15% less gas.
Everybody who had a part to play in Russian defeat is going to be patting themselves on the back. Sanctions may have had only a small part in that, but it was a part, and anybody complaining about sanctions is going to be on the wrong side of history.
These sound like nice words on paper, but how do you go to war with a nuclear power without triggering Armageddon? It’s a serious question. MAD is absolutely still a thing and nukes are the best protector of sovereignty ever devised.
Utter rubbish. If you want to send kids to war, do it with your own.
Ukraine is neither in NATO, nor the EU. The best course of action is supporting it while it frees itself with its own means, which is what is happening.
The utter stupidity of thinking that (hey, this is your line, I'm just repeating it) NATO could put soldiers into Ukraine without starting a thermonuclear global holocaust in the form of WW3.
I would go so far as to suggest that NATO has done 110% of what they can against Russia. Unlimited money for Ukraine, unlimited supplies for Ukraine, unlimited training for Ukraine, and even now basically unlimited intelligence! Think of the HIMARS! The Karkhiv offensive is Ukraine's 'first truly western' attack, complete with a southern feint, built entirely on western intelligence and strategy. And as a result, Ukraine is routing the Russian military who are in drop-everything-and-run mode in half of Ukraine. Is that not a success??
Europe/US westernized/NATOized the Ukrainian military in about 6 months flat and spared no expense in the process.
Short of starting a nuclear world war 3, it's hard to imagine doing more.
Putting NATO soldiers on the ground is equivalent to declaring WW3, few are willing to do that.
Therefore, Ukraine's fate is sealed and the outcome is dictated by Russia's desires.
The open question is how long it will take and at what cost, to Ukraine, its allies and Russia. And it seems that there are vested interests in prolonging the conflict as much as possible.
> effective response or deterrent to military aggression
(1) We shouldn't conflate current deterrent & future deterrent. Putin may be all in already, but you can signal to a future autocrat that he'll risk the stability and safety of his rule if he follows in Putin's footsteps. Selfish autocrats don't want to die.
(2) Some targeted sanctions are actually effective. You hamper their military industry supply chain, which they need for a long war.
Inflation that's not to do with wages seems a different problem to me.
If gas or tomato prices are going up such that everything that uses gas or tomatoes goes up. You could say that's inflation because gas and tomatoes are so widely used.
Or you could just say it's a price signal. You need to use less gas/tomatoes as they are in short supply.
It doesn't seem to be as circular as the wage based inflation, where the higher wages and the higher costs are the same thing and recurse.
If your wages track inflation, then you were previously underpaid for your skill set.
In reality, higher costs may eventually be followed by compensating higher pay, but in the interim everyone just works the same for the same (devalued) pay with a steep drop in discretionary spending because the step function to 'unemployed' is so painful that everyone would rather handle the price feedback through attrition. And in the meantime we get the shittification of all service that wasn't previously operating at high margins, because everyone is making do with understaffing.
And, of course, tomatoes are ridiculous equivalency to attempt. Transportation, energy, and agriculture all lie directly downstream of oil/methane costs, to name a few obvious examples.
Properly managed, the Baltic states in particular will come out of this energy crisis as winners. Green energy is the very obvious answer for them, even more than for other countries. Cheap and reliable.
They have all that's required to be self sufficient and even exporters in terms of energy:
- little heavy industry
- very low population density in rural areas
- mostly centralised heating networks in urban areas
- plenty of cheap biomass, mostly for use in winter
- a fairly decent bit of sun, mostly for use in summer
- plenty of hydro power [0]
- fairly good hvdc interconnects
- plenty of cheap EU cofinancing
- a population largely ready to stick it to the godfather in Moscow
These are the pros but you forgot to outline the cons. One of the big issues with green energy in the Baltics is the lack of grid capacity. You can have solar panels fitted but unless the grid has enough throughput for you to be able to actually sell it back it's not worth much. These days the costs to upgrade the local grid are prohibitively expensive so it's not going to happen unless the government does it.
I guess this time we can admit a supply problem is to blame and not the usual money printing/government spending explanation, since Estonia is well known for having a tiny debt to GDP ratio.
[+] [-] rvnx|3 years ago|reply
The cash that the governments printed via negative interests to give to the VCs and to real-estate owners really skewed the local market (increasing both prices and costs of producing).
The Estonian gov has basically no tools to fight against the real estate bubble either or to bankroll the most fragile startups (and they may not be as strong as they seem), so we're basically fucked.
Regarding energy, we had 4000 EUR / MWh prices a couple of weeks ago for an hour.
Think of it as oven / sauna / air conditioner costing you 10 to 25 euros per hour (if I remember right, it didn't matter that much when you have no other choice than turning them off).
For energy this is mostly because of the war, but ecological policies also affected (Estonia was known for "dirty" petrol, known as shale oil, and they are restricted there).
The only retail companies that try hard to provide good prices are LIDL and IKEA, and in that regards, they are great.
Other distributors have very poor logistics as they consider Estonia as the very end of their distribution chain (no matter if for Baltics, or for Scandinavia we are at the end of the West).
[+] [-] zoobab|3 years ago|reply
Finally someone who undestood this was not linked to the war in Ukraine, but to the policy of the ECB to print money at will.
[+] [-] mrtksn|3 years ago|reply
Any country that has achieved good living standards sees their citizens pushed out of housing by the rich people of other countries. Since the inflow is capital-only, you don't see inflow of people who can contribute to the society but you see people who come and consume resources just because they made wealth buildup oversees.
People like to blame it on immigrants but when working class immigrants come they works their a*ss off and contribute huge amount into the society.
It's almost like enslavement.
Someone in a corrupt county somehow builds up some wealth, which is essentially what the society owes them(IOU). Normally they would figure out what is actually owed to who by themselves but they take that IOU's and move to, let's say a country that has good living standards, like Portugal. Now the government is happy about it because they have IOU inflow that they can tax or stir up the economy but these rich people often don't use the IOU's to bring machinery or pay Portuguese to do research or anything like that. What they do is real estate investments.
Normally that would have been O.K. but since that money is not moving in a free market(remember, only the money can move. It's very hard to move around people and services), what you have is extreme market movements due to extreme capital movements without extreme movements in labour.
For example, when a Russian oligarch brings 10 billion dollars to London, suddenly huge demand is created but Russians who owe the oligarch the services can't come to build houses needed. Obviously their money goes into other parts of the British economy but you end up with Russians in poverty, overpaid people in some sectors where the oligarch money flows and local residents who cannot afford to pay rent despite working very hard.
That's why I'm proponent for restriction of capital movements wherever there are restrictions on human movements OR removing all restrictions on all kind of movements. In the first case we will have a patchy world where those societies who got their act together flourish(but they might do nasty things to the weaker ones. Also we lose many benefits of globalisation, like specialisation) and with the second option we will have an equalised world based on merit(however the transition will be very painful for those who are in a good standing currently, it also takes generations to learn to live together).
[+] [-] Etheryte|3 years ago|reply
[+] [-] epistasis|3 years ago|reply
Inflation may be too much money chasing too few goods, but the "too few goods" part is absolutely crucial here. And if we want and expanded economy, the "too few goods" part should be the focus.
[+] [-] _xnmw|3 years ago|reply
Furthermore, sanctions, by definition, hurt both parties. It is impossible to design a boycott that doesn't hurt both the buyer and the seller. The only question is: who gets hurt more? If Europe was so determined to "stand with Ukraine" then they should've put soldiers on the ground over there, not shot themselves in the foot with sanctions on goods that they need.
[+] [-] ajsnigrutin|3 years ago|reply
Depends on the murderer.... sometimes we send them more soldiers to help them in places like afghanistan.. and syria.. and iraq.. and many more.
I live in a very small eu/nato country that noone cares about, and we still do it... so my taxpayer money is used for occupying eg. syria right now, in a conflict we literally have no interest in and profit nothing from.
[+] [-] Vinnl|3 years ago|reply
So the idea is not so much to "stand with Ukraine", it's to stand with whoever is next. The threat of sanctions should be enough to prevent the future use of force, but you have to be prepared to pull through when they're ignored for that to work.
[+] [-] idontwantthis|3 years ago|reply
Would Europe keep buying Russian gas while killing Russian soldiers?
[+] [-] celticninja|3 years ago|reply
Also Europe doesnt need Russian gas. It has become reliant on it sure, but it is weaning itself off that and that gives them more power and Russia less in the long term. Your points look at the immediate short term (less than 12 months) and does little to consider beyond that timeframe.
[+] [-] agilob|3 years ago|reply
08.12.2014 https://www.reuters.com/article/baltic-gas-idUSL6N0TS2T32014...
17.10.2018 https://www.washingtonpost.com/world/2018/10/17/eastern-euro...
03.02.2022 https://news.err.ee/1608487619/estonia-suspends-all-oil-tran...
[+] [-] Isinlor|3 years ago|reply
My country Poland offered military intervention during the first trip to Kyiv after invasion, Ukraine refused.
Ukrainians want weapons. Last I check they were asking for stuff like ATACMS.
Listen to what Ukrainians are saying. They know what is the best for them in the current situation.
[+] [-] bryanlarsen|3 years ago|reply
Everybody who had a part to play in Russian defeat is going to be patting themselves on the back. Sanctions may have had only a small part in that, but it was a part, and anybody complaining about sanctions is going to be on the wrong side of history.
[+] [-] dougmwne|3 years ago|reply
[+] [-] Bayart|3 years ago|reply
Ukraine is neither in NATO, nor the EU. The best course of action is supporting it while it frees itself with its own means, which is what is happening.
[+] [-] criley2|3 years ago|reply
I would go so far as to suggest that NATO has done 110% of what they can against Russia. Unlimited money for Ukraine, unlimited supplies for Ukraine, unlimited training for Ukraine, and even now basically unlimited intelligence! Think of the HIMARS! The Karkhiv offensive is Ukraine's 'first truly western' attack, complete with a southern feint, built entirely on western intelligence and strategy. And as a result, Ukraine is routing the Russian military who are in drop-everything-and-run mode in half of Ukraine. Is that not a success??
Europe/US westernized/NATOized the Ukrainian military in about 6 months flat and spared no expense in the process.
Short of starting a nuclear world war 3, it's hard to imagine doing more.
[+] [-] nprateem|3 years ago|reply
[+] [-] lazyjones|3 years ago|reply
Therefore, Ukraine's fate is sealed and the outcome is dictated by Russia's desires.
The open question is how long it will take and at what cost, to Ukraine, its allies and Russia. And it seems that there are vested interests in prolonging the conflict as much as possible.
[+] [-] brnt|3 years ago|reply
[+] [-] viraptor|3 years ago|reply
You're assuming that money and power matters less to Putin / oligarchs than soldiers' lives. I'm not sure that's a valid assumption.
> We don't impose monetary fines on murderers
Individually - no. At a larger scale - yes. For example fines / taxes from https://www.epa.gov/laws-regulations/summary-clean-air-act
[+] [-] hackerlight|3 years ago|reply
(1) We shouldn't conflate current deterrent & future deterrent. Putin may be all in already, but you can signal to a future autocrat that he'll risk the stability and safety of his rule if he follows in Putin's footsteps. Selfish autocrats don't want to die.
(2) Some targeted sanctions are actually effective. You hamper their military industry supply chain, which they need for a long war.
[+] [-] BurningFrog|3 years ago|reply
[+] [-] jostiniane|3 years ago|reply
[deleted]
[+] [-] ZeroGravitas|3 years ago|reply
If gas or tomato prices are going up such that everything that uses gas or tomatoes goes up. You could say that's inflation because gas and tomatoes are so widely used.
Or you could just say it's a price signal. You need to use less gas/tomatoes as they are in short supply.
It doesn't seem to be as circular as the wage based inflation, where the higher wages and the higher costs are the same thing and recurse.
[+] [-] tbihl|3 years ago|reply
In reality, higher costs may eventually be followed by compensating higher pay, but in the interim everyone just works the same for the same (devalued) pay with a steep drop in discretionary spending because the step function to 'unemployed' is so painful that everyone would rather handle the price feedback through attrition. And in the meantime we get the shittification of all service that wasn't previously operating at high margins, because everyone is making do with understaffing.
And, of course, tomatoes are ridiculous equivalency to attempt. Transportation, energy, and agriculture all lie directly downstream of oil/methane costs, to name a few obvious examples.
[+] [-] markvdb|3 years ago|reply
They have all that's required to be self sufficient and even exporters in terms of energy:
- little heavy industry
- very low population density in rural areas
- mostly centralised heating networks in urban areas
- plenty of cheap biomass, mostly for use in winter
- a fairly decent bit of sun, mostly for use in summer
- plenty of hydro power [0]
- fairly good hvdc interconnects
- plenty of cheap EU cofinancing
- a population largely ready to stick it to the godfather in Moscow
[0] https://en.wikipedia.org/wiki/List_of_power_stations_in_Latv...
[+] [-] Etheryte|3 years ago|reply
[+] [-] heavenlyblue|3 years ago|reply
Source: https://app.electricitymaps.com/zone/LV
[+] [-] vintermann|3 years ago|reply
[+] [-] qwerty456127|3 years ago|reply
[+] [-] wyuenho|3 years ago|reply
[+] [-] refurb|3 years ago|reply
If it costs $250EUR to deliver a barrel of oil, and you cap it at 100EUR, what happens?
If you were an oil company and the government says you can only sell your 250EUR barrel of oil for 100EUR, what would do?
[+] [-] pydry|3 years ago|reply
[+] [-] unknown|3 years ago|reply
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[+] [-] jostiniane|3 years ago|reply
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[+] [-] newaccount2021|3 years ago|reply
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[+] [-] gadders|3 years ago|reply
[+] [-] nicoburns|3 years ago|reply
[+] [-] unknown|3 years ago|reply
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[+] [-] tehlike|3 years ago|reply